Japan ratings firm keeps invest grade

Japanese credit watchdog Rating and Investment Information Inc. (R&I) affirmed the investment grade of the Philippines with a stable outlook.

The A- rating reflects the country's robust growth, low inflation, and strong external position.

An investment-grade rating signals low credit risk, thereby helping reduce borrowing costs. This enables a country to allocate more funds to socially beneficial initiatives and programs.

In its report released on 20 August, R&I underscored that the country’s growth rate of 5.7 percent in 2024 is one of the fastest in Southeast Asia. It also cited the country’s inflation rate, which fell to a six-year low of 0.9 percent in July 2025.

The rating agency said the impact of the 19-percent US reciprocal tariffs is limited, citing the Philippine economy’s relatively low reliance on exports to the US.

It also added the manageable current account deficit and external debt levels, as well as sufficient foreign exchange reserves, which underpin the country’s robust external position.

The continued growth of overseas Filipino remittances contributed to the favorable external sector outlook, according to the Japanese firm.

Banking industry stable

The agency also cited stability of the banking sector as a key rating driver.

“The low inflation environment is thanks to the agile and evidence-based monetary policy. This environment supports an investment climate that is conducive to economic growth,” Bangko Sentral ng Pilipinas Governor Eli M. Remolona, Jr. said.

“In line with its financial stability mandate, the BSP continues to strengthen the Philippine banking system through policies that underscore strong capitalization, prudent risk management, and sound governance. These enable banks to finance productive economic activities while navigating a fast-evolving global economic landscape,” added the Governor.

The latest rating decision by R&I on the Philippines echoed the positive assessments of other credit rating agencies.

S&P Global Ratings revised its outlook on the Philippines’ rating to positive in November 2024, while Japan Credit Rating Agency and Fitch Ratings affirmed the country’s credit rating at “A-” and “BBB,” respectively, with a “stable” outlook in Q2 2025.