Credit rating agency Fitch Ratings has affirmed today the Philippines’ credit rating of ‘BBB’ and improved its outlook from ‘negative’ to ‘stable.’
“The improved outlook for the Philippines to ‘stable’ is a testament to the country’s robust macroeconomic fundamentals, as evidenced by the economy’s strong growth performance in 2022 at 7.6 percent and 6.4 percent in the first quarter of 2023,” Finance Secretary Benjamin E. Diokno said in a statement.
A rating of ‘BBB’ sits above the minimum investment grade and suggests that expectations of default risk are low. It also indicates the ability of the country to meet its financial commitments.
A sovereign investment-grade rating signals a country’s creditworthiness and allows it to access funding from development partners and international capital markets at lower cost.
According to the report, the revision of the outlook to ‘stable’ reflects Fitch’s improved confidence in the Philippines’ return to strong medium-term growth after the COVID-19 pandemic, sustained reductions in the country’s debt-to-GDP ratio, and the country’s sound economic policy framework.
Fitch forecasts that the Philippines’ real GDP growth will reach above six percent over the medium term, higher than the median ‘BBB’ growth rate of three percent.