JCR affirms Phl banking system strength, stability

The Bangko Sentral ng Pilipinas (BSP) welcomed the latest assessment of Japan Credit Rating Agency (JCR), reaffirming the strength and stability of the Philippine banking system.

JCR maintained the country’s investment-grade credit rating at “A-” with a “stable” outlook, citing strong loan growth, lower non-performing loan (NPL) levels, and capital adequacy ratios that remain well above both local and global benchmarks.

BSP Governor Eli Remolona Jr. said the central bank continues to implement policies that reinforce financial resilience.

BSP policies

“The BSP continues to implement policies that promote robust capitalization and sound risk management among banks. These support financial stability and further build confidence in the domestic financial system,” Remolona explained.

The banking sector’s capital adequacy ratio stood at 16.5 percent on a consolidated basis for universal and commercial banks, while the NPL ratio eased to 3.1 percent as of end-July, down from 3.6 percent in 2021.

JCR also pointed to easing inflation and healthy external buffers as factors behind its outlook. Inflation averaged 1.7 percent in the first eight months of 2025, while gross international reserves (GIR) reached $105.9 billion in August, equivalent to 7.2 months’ worth of imports and 3.4 times the country’s short-term external debt.

Solid foreign currency liquidity position

The agency emphasized the Philippines’ “solid foreign currency liquidity position,” noting that it will allow the country to remain “remarkably resilient” against external shocks.

An investment-grade rating signals low credit risk, which helps reduce borrowing costs for the government and the private sector. This, in turn, enables greater funding for priority programs and investments that support long-term growth.