Low GDP per capita, political volatility weigh on Phl ratings - Fitch

The Philippines' sovereign rating remains constrained by structural weaknesses, including low gross domestic product (GDP) per head and governance standards that lag behind peers, Fitch Ratings said.

- By KEISHA TA-ASAN

In its latest report, Fitch said the country's BBB rating reflects its strong medium-term growth, which supports a gradual reduction in government debt to GDP over the medium term and the large size of the economy relative to 'BBB' peers.

However, "the rating is constrained by low GDP per head, despite an upward trend. Governance standards are weaker than at peers, though Fitch believes World Bank Governance Indicator scores somewhat overstate this," it said.

GDP growth has also slowed since COVID-19 pandemic rebound in activity. Still, GDP is expected to grow by 5.7 percent in 2024 and further to 6.2 percent in 2026.