S&P upgrades Philippines’ credit rating outlook to positive

S&P Global Ratings (S&P) upgraded the Philippines’ credit rating outlook to “positive,” signaling a potential upgrade to an “A-” rating within 24 months. This move is expected to reduce the country’s borrowing costs and attract more investors.

Finance Secretary Ralph G. Recto said the affirmation of the Philippines’ BBB credit rating and the outlook upgrade by S&P are strong endorsements of President Ferdinand R. Marcos Jr.’s leadership and the government’s sound economic and fiscal policies.

S&P cited several factors for the upgrade, including the Philippines’ above-average growth potential, effective policymaking, fiscal reforms, improved infrastructure, and strong external position.

“This reaffirms our stable economic and political environment and that we are on track to achieve a growth-enhancing fiscal consolidation,” Recto said.

The upgrade allows the Philippines to maintain its high investment-grade status across major regional and international debt rating agencies.

S&P highlighted the Philippines’ strong economic outlook, anchored by infrastructure investments, pro-business policies, and a well-established Medium-Term Fiscal Framework. The agency expects the economy to grow at 5.5% in 2024 and 6.2% annually over the next three years.

While global economic growth may slow, S&P believes the Philippines’ diversified economy, supportive policies, and improving investment climate will drive above-average growth.

The Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act and other reforms, such as the Public-Private Partnership (PPP) Code, are expected to attract more foreign direct investment.

S&P also noted the Philippines’ solid household and corporate balance sheets, sizable remittance inflows, and improving fiscal performance. The government’s commitment to the medium-term fiscal framework will help reduce the deficit and debt gradually.

The agency highlighted the Philippines’ manageable fiscal deficit, declining debt ratio, and improved expenditure quality. The government’s 2025 budget prioritizes social services and infrastructure development.