Fitch Reaffirms PH's Credit Rating, Cites Success in Taming Inflation

Fitch Ratings has reaffirmed the Philippines’ “BBB” credit rating with a “stable” outlook, citing the country’s success in taming inflation and maintaining macroeconomic stability.

​According to the Philippine Statistics Authority, inflation eased to 1.8 percent year-on-year in March from 2.1 percent in February. The year-to-date average stood at 2.2 percent.

Fitch views the Bangko Sentral ng Pilipinas’ (BSP) inflation targeting framework as “credible.” It also sees inflation remaining at around 2 percent in 2025 and 2026. This is at the low end of the National Government’s target range of 2 to 4 percent.

BSP Governor Eli M. Remolona, Jr. welcomed Fitch's reaffirmation of the country’s investment-grade credit rating. He said, “The BSP took actions to help keep inflation manageable and promote sustainable economic growth. The BSP will continue to do so.”

The credit rating agency also cited the Philippines’ “solid domestically driven growth.” Gross domestic product (GDP) grew by 5.3 percent in the fourth quarter of 2024, with full-year growth at 5.7 percent.

Fitch expects the Philippine economy to expand by 5.6 percent in 2025, driven by infrastructure spending, services exports, and remittance-backed private consumption. Medium-term growth is projected at 6.0 percent.

Fitch also noted that the country’s domestic focus limits exposure to global trade tensions. The relatively low US tariff announced by the US on Philippine exports this month could also be an advantage compared to regional peers.

Other rating agencies recently echoed the positive assessments. S&P Global Ratings revised its outlook to positive in November 2024. Meanwhile, Rating and Investment Information, Inc., upgraded the country to “A-” with a stable outlook in August last year.

An investment-grade rating signals low credit risk and affordable access to funding. This enables a country to allocate funds to socially beneficial initiatives and programs.