JAPAN Credit Rating Agency, Ltd. (JCR) kept the Philippines’ ‘A-‘ credit rating with a ‘stable’ outlook on the back of underlying credit strengths despite the sharp economic slowdown.
JCR announced on Friday that it affirmed the sovereign’s foreign and local currency long-term issuer ratings, reflecting ‘high and sustained’ economic growth backed by domestic demand, low-level external debt and resilience to external shocks thanks to accumulated foreign exchange reserves.
‘However, reducing income disparity through rural development and infrastructure development remain important tasks to be addressed,’ the credit rater raised.
The slowdown in the pace at which public works projects are being implemented and weaker consumption brought on by rising crude oil prices were also noted by JCR as culprits to the slowing of economic growth.
As a result, the pace of fiscal improvement has slowed, with JCR expecting the government debt-to-GDP ratio to remain in the mid-60 percent range for some time.
Among the sovereigns rated in the A-range by the credit rater, the Philippines’ 63.2-percent government debt-to-GDP ratio at the end of 2025 is a ‘relatively low level,’ JCR said.
‘JCR believes that, as the government works to improve the investment environment and advance industrial upgrading, the economy will return to high growth rates over the medium term,’ it said.
Full-year 2026 real GDP growth is projected by JCR to reach the mid-3 percent range, fueled by recovery in public infrastructure investment and the effects of price stabilization policies.
JCR also cited the government’s promotion of infrastructure investment under the ‘Build, Better, More’ policy to address the infrastructure gap, while utilizing public-private partnerships to complement public infrastructure spending.
The agency also pointed to the 2024 enactment of the Create More Act, which seeks to expand tax incentives and clarify the value-added tax system, as a measure that should further improve the country’s investment environment.
It, likewise, mentioned the Philippines’ participation in the US-led Pax Silica, a multilateral initiative launched this year aimed at ensuring a stable supply of semiconductors, artificial intelligence, critical minerals and other resources.
Moreover, JCR expects the economy will continue being highly resilient to future external shocks as the country’s foreign exchange liquidity position remains solid despite the growing uncertainty brought on by the deteriorating situation in the Middle East.
Foreign exchange reserves hit a total $110.8 billion at the end of 2025, more than seven months’ worth of imports.
‘JCR’s affirmation of the Philippines’ A- rating and Stable outlook reflects the resilience of our economy and the government’s commitment to fiscal consolidation and long-term reforms,’ Finance Secretary Frederick D. Go was quoted in a statement as saying.
‘It reinforces investor confidence and supports our efforts to attract investments, create quality jobs, and sustain inclusive growth,’ he added.
Bangko Sentral ng Pilipinas Governor Eli M. Remolona also said in a statement that JCR’s affirmation of the country’s credit rating indicates the importance of upholding sound policies and continuing reforms that support investment and productivity at a time of heightened uncertainty.
‘For its part, the BSP will continue to promote price stability, safeguard financial stability, and ensure safe and efficient payments and settlements. These efforts support sustainable growth and broader economic opportunities for Filipinos,’ Remolona said.
Just this Monday, Moody’s Ratings maintained its ‘Baa2’ long-term local and foreign currency issuer and senior unsecured ratings for the Philippines and kept its outlook stable.
Last week, Rating and Investment Information, Inc. (RandI) also affirmed the country’s ‘A-‘ investment-grade credit rating and maintained its ‘stable’ outlook.
The Philippines currently holds a ‘BBB+’ investment-grade credit rating from SandP Global Ratings and ‘BBB’ from Fitch Ratings.