S&P Global Ratings Raises Philippine Credit Rating Outlook to Positive

S&P Global Ratings (S&P) raised the Philippines’ credit rating outlook to “positive,” indicating a possible upgrade to an “A-” rating within 24 months, helping lower borrowing costs and making the country more attractive to investors.

​S&P kept the sovereign credit ratings at “BBB+" for long-term and “A-2” for short-term.
 
S&P raised the outlook citing the country's effective policy making, fiscal reforms, improved infrastructure and policy environment that have helped keep economic growth strong in the past decade. They also cited the recent passage of the CREATE MORE and PPP laws.
 
An improved rating or outlook helps the government borrow at lower interest rates, allowing it to fund more services and infrastructure. This also helps businesses borrow at lower rates, helping fund expansion and job creation.
 
Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. said, “The BSP welcomes S&P’s decision. This reflects the work the government has done to improve the economic, fiscal, and monetary environment, enabling strong growth to continue.”
 
“The BSP remains committed to promoting price stability, financial stability, and an efficient payment system to support sustainable economic growth.”
 
S&P expects a 5.5 percent growth for the Philippine economy in 2024 In Q3 2024, the Philippine Statistics Authority reported a 5.2 percent year-on-year gross domestic product (GDP) growth, bringing the average for the first three quarters to 5.8 percent.
 
The Philippines remains one of the fastest-growing economies in Asia, behind Vietnam (7.4 percent) and ahead of Indonesia (4.9 percent), China (4.6 percent), and Singapore (4.1 percent).
 
S&P also noted a recent slowdown in inflation, with prices rising by only 3.4 percent in the first nine months of 2024, down from 6.0 percent in previous year.
 
Governor Remolona said the Philippines has ample reserves to protect against global economic fluctuations. As of end-October 2024, the country’s gross international reserves rose to USD111.1 billion. This is enough to cover 8.0 months’ worth of imports, well above the three-month benchmark suggested by the International Monetary Fund.  
 
S&P has commended the BSP's strengthened oversight of the financial sector, contributing to improved stability.
 
The BSP confirmed that Philippine banks are well-capitalized and highly liquid, with capital adequacy and liquidity ratios surpassing both BSP regulatory and international standards.
 
S&P raised the Philippines’ rating to its current level in 2019, BBB- in 2013, and BBB in 2014. The next level is A-, the entry point to A ratings. Moody’s and Fitch rate the Philippines Baa2 and BBB, which are one level below the S&P rating.