S&P keeps Philippine ratings, outlook downgraded

Standard & Poor’s (S&P) Global maintained its bullish outlook on the long-term growth of the Philippine economy despite the lingering effects of the flood control scandal and the Middle East energy crisis.

In a statement, the international analytics firm said it remains optimistic about the country’s long-term growth prospects, noting, however, that it has downgraded its outlook from “positive” to “stable” in light of recent domestic and external economic headwinds.

“On April 8, 2026, S&P Global Ratings revised its rating outlook on the Philippines to stable from positive. We affirmed our 'BBB+' long-term and 'A-2' short-term sovereign credit ratings,” S&P Global said.

“The stable rating outlook reflects our view that, over the next two years, the Philippines will maintain healthy economic growth rates that will allow fiscal performance to improve gradually while external metrics deteriorate slightly,” it added.

S&P Global’s BBB+ long-term rating indicates that the Philippines has adequate capacity to meet its long-term financial obligations and remains investment-grade, although it is somewhat vulnerable to economic risks. Meanwhile, its A-2 short-term rating reflects a strong ability to meet short-term debt obligations with a low risk of default.

A stable outlook from S&P Global suggests that a country’s credit rating is likely to remain unchanged over the next two years, reflecting balanced domestic and external risks alongside generally steady economic conditions.

The firm also maintained its gross domestic product (GDP) growth forecast of 5.8 percent for 2026, remaining bullish on a potential second-half rebound despite the recent oil price shock.

“The ongoing energy price shocks that started in March 2026 will further dampen economic activity in the Philippines. We expect consumer sentiment to be undermined, with decreased growth in household spending,” it said.

“These weaknesses will drag on growth in the first half of 2026. We expect a rebound in the second half of the year, such that GDP grows 5.8% for the whole year," S&P added, noting that such a recovery will be driven by “supportive policy dynamics and an improving investment climate.”

The Bangko Sentral ng Pilipinas (BSP), in a separate statement, noted S&P’s affirmation of the country’s long-term credit rating.

“The BSP will continue to monitor local and overseas data to effect policies aimed at safeguarding price and financial stability amid a challenging economic and geopolitical landscape,” said BSP Governor Eli M. Remolona Jr.