MANILA, Philippines — The Philippines has retained its A- investment-grade credit rating from Japan-based Rating and Investment Information Inc. (R&I), a move that signals continued confidence in the country’s creditworthiness even as the economy faces a tougher growth environment in 2026.
In its August 2026 rating action, R&I maintained the Philippines’ A- foreign-currency issuer rating and a stable outlook. The agency also kept the country’s foreign-currency short-term debt rating at a-1.
The decision provides a positive signal for investors, but it comes with an important caveat: R&I expects Philippine economic growth this year to fall below the 4.4% recorded in 2025. The government’s current 2026 GDP growth target is between 3.5% and 4.5%.
Why R&I kept the Philippines at A-
R&I pointed to several factors supporting the Philippines’ credit standing, including the country’s diversified economic base, improving fiscal position, manageable external debt and stable banking system.
The agency also sees longer-term growth potential from population growth, infrastructure investment and foreign direct investment—areas that remain central to the government’s economic agenda.
The Philippine economy’s diverse sources of activity, including tourism, IT-BPM services, manufacturing and the semiconductor supply chain, also provide a buffer against shocks affecting individual industries.
The Department of Finance said the affirmation reflects confidence in the government’s fiscal consolidation efforts and economic reforms.
Finance Secretary Frederick Go said the rating could strengthen investor confidence, improve access to financing and help attract investments that generate jobs and economic opportunities.
But there is a warning behind the good news
While maintaining its stable outlook, R&I did not ignore the Philippines’ near-term challenges.
The agency expects 2026 growth to be weaker than last year’s 4.4% expansion, with slower infrastructure spending and elevated energy costs weighing on domestic economic activity.
The Philippine Star reported that R&I linked the slowdown partly to delays in infrastructure spending following stricter validation and governance measures amid allegations surrounding flood-control projects.
That makes the rating decision more nuanced than a simple vote of confidence.
The Philippines remains investment grade—but the pace at which the economy grows from here will matter.
What happens next?
R&I expects the country’s growth momentum to improve as infrastructure spending normalizes, while the medium-term fiscal picture is expected to strengthen.
The agency also highlighted the country’s improving fiscal balance and positive debt-ratio outlook over the medium term.
That outlook is particularly important because sovereign credit ratings influence how international investors and lenders assess a country’s ability to meet its financial obligations.
An investment-grade rating generally supports better access to capital markets and can help lower borrowing costs, although the actual cost of borrowing also depends on market conditions and other economic factors.
BSP welcomes the rating
Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. also welcomed the continued A- rating and stable outlook.
The BSP pointed to the country’s sound banking system, efficient payments infrastructure and healthy external position as factors supporting economic resilience.
The central bank also continues to focus on bringing inflation toward its 3% target, which Remolona said would help protect household purchasing power and support investment activity.
The positive credit assessment comes as Philippine economic growth has been under pressure. Recent data cited by the Philippine News Agency showed GDP growth slowed to 2.3% in the second quarter of 2026 from 2.8% in the first quarter, prompting the BSP to acknowledge that economic growth remains below potential.
A vote of confidence—but not a free pass
R&I’s latest decision gives the Philippines an important piece of good news at a time when policymakers are trying to revive growth while maintaining fiscal discipline.
The country has preserved its A- investment-grade standing, but the agency’s warning over slower 2026 growth underscores the challenge ahead.
For investors, the message is increasingly clear: the Philippines still has strong underlying fundamentals, but faster infrastructure execution, sustained reforms and a return to stronger economic growth will be critical to keeping that confidence intact.
The rating was maintained. The outlook remains stable.
Now, the bigger question is whether the Philippine economy can turn that confidence into stronger growth.
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