The Department of Finance (DOF) and Bangko Sentral ng Pilipinas (BSP) welcomed Moody’s Ratings’ decision to affirm the Philippines’ investment-grade ‘Baa2’ rating with a stable outlook, saying the assessment reflects the country’s steady credit standing despite economic headwinds.
In a statement, Finance Secretary Frederick Go said the affirmation shows the resilience of the Philippine economy amid the global energy shock and slowdown in public infrastructure spending.
‘We welcome the stable outlook credit-rating affirmation, even as the world deals with real headwinds. Moody’s assessment confirms our strong macroeconomic fundamentals, and that the reforms we’ve put in place are working.’ Go said.
Moody’s is now the only one of the three major credit rating agencies to maintain a stable outlook on the Philippines.
In April, Fitch Ratings revised its outlook to negative from stable, while SandP Global Ratings lowered its outlook to stable from positive.
Separately, the BSP said the latest development recognized the country’s ability to withstand headwinds.
‘On the part of the BSP, we will continue working to bring inflation back close to target, safeguard the soundness of the country’s banking system, promote a safe and efficient payments and settlements system, and prudently manage the country’s international reserves,’ the central bank said.
‘These efforts help preserve macroeconomic and financial stability, which supports sustainable and inclusive growth,’ it added.
Moody’s affirmed the Philippines’ Baa2 rating on Monday, leaving it two notches below the coveted A-level rating. The Philippines first attained a Baa2 rating in December 2014.
Despite affirming the rating, Moody’s has still become more cautious about the Philippines’ near-term economic and fiscal outlook.
The credit rater cut its 2026 growth forecast for the Philippines to 3.6 percent from its previous 5.5-percent projection, while trimming its 2027 forecast to 5.3 percent from 5.6 percent. Both forecasts, however, remain within the Marcos administration’s targets of 3.5 to 4.5 percent for 2026 and 5 to 6 percent for 2027.
Moody’s also raised its forecast for the country’s current account deficit in 2026 to around 4 percent of GDP from 3.4 percent previously.
Its projection for the general government debt burden was likewise raised to around 58 percent of GDP in 2026 from 54 percent previously, while interest payments are now expected to absorb more than 14 percent of government revenue over the next two to three years, up from its previous estimate of 12.3 percent.
Still, Moody’s kept its general government deficit forecast unchanged at around 3.9 percent of GDP for 2026.
‘The stable outlook reflects our expectation that the government’s fiscal consolidation path and debt stabilization remain broadly on track despite the current cyclical slowdown. This view is supported by the government’s track record of navigating successive external shocks while maintaining broadly prudent macroeconomic policies,’ Moody’s said.
These expectations are balanced against risks that weaker confidence, political developments ahead of the 2028 elections, or delays to planned revenue measures weigh on investment, growth and fiscal consolidation,’ it added