The Japan Credit Rating Agency, Ltd. (JCR) has affirmed the Philippines’ investment-grade credit rating of "A-" and maintained a stable economic outlook, citing the country’s expected economic growth of above 5 percent this year.
In a statement, the Bangko Sentral ng Pilipinas (BSP) on Thursday shared JCR’s assessment, noting that the local economy grew by 5.4 percent in the first quarter, up from 5.3 percent in the fourth quarter of 2024, based on data from the Philippine Statistics Authority.
The Philippines posted the second-fastest growth rate in Asia, trailing Vietnam’s 7 percent but surpassing Indonesia’s 4.9 percent and Malaysia’s 4.4 percent.
"Despite increased uncertainty due to changes in US tariff policies, the Philippines’ foreign exchange liquidity position remains solid, and JCR expects the economy to retain high resilience to external shocks going forward," JCR said.
BSP attributed the credit rater’s positive outlook to low local inflation rates, which helped sustain foreign investments and business activities in the country.
The average inflation rate for the first four months of the year stood at 2 percent, hitting the Central Bank’s minimum target.
Household consumption rose by 5.3 percent in the first quarter from 4.7 percent quarter-on-quarter. The largest revenue expansions were seen in wholesale and retail trade, financial and insurance, and manufacturing sectors.
"JCR’s affirmation will support and strengthen investment from Japan, one of the Philippines’ most important partners," BSP Governor Eli Remolona Jr. said.
BSP also reported that the Philippines’ gross international reserves remained more than adequate in the first four months at $105.3 billion, enough to cover 7.3 months of imports and 3.6 times the short-term external debt based on residual maturity.
Equity investments, excluding reinvestment of earnings in February, settled at $108 million, with the bulk coming from Japan (56 percent) followed by the United States (11 percent).
Finance Secretary Ralph Recto expects more foreign investments as the government implements tax incentives under the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE) law.
He added that business growth will continue to provide incomes to more Filipinos under the Capital Markets Efficiency Promotion Act, which encourages stock market participation by reducing stock transaction tax from 0.6 percent to 0.1 percent and lowering documentary stamp tax on original stock issuance from 1 percent to 0.75 percent.
"We will continue to work on creating an investment-enabling environment to increase the country's economic growth potential," Recto said.
The government managed to keep the national debt-to-GDP ratio at 60.7 percent last year, below the 70 percent international threshold.
The outstanding national debt stood at P16.75 trillion as of end-April.
Despite this, finance officials noted that Philippine debt remains lower than in other Asian countries such as Singapore (P53.68 trillion), South Korea (P46.89 trillion), and Indonesia (P31.37 trillion).