The chief economic manager lauded the recent move by the Japan-based Rating and Investment Information Inc. (R&I), which affirmed the economy’s investment-grade rating at ‘A-’ with a stable outlook, citing the country’s strong economic performance, improving fiscal position, and rising public and private investments.
“This is a victory that every Filipino should celebrate. It means that credit rating agencies and investors continue to have strong confidence in us. This will attract more investments, create more quality jobs, raise incomes, and lift more Filipinos out of poverty,” Finance Secretary Ralph Recto said.
In its report released on 20 August, R&I underscored that the Philippines remains one of the fastest-growing economies in Southeast Asia, with a 5.7 percent GDP growth in 2024 and a 5.5 percent expansion in the second quarter of 2025, outpacing peers such as China, Indonesia and Malaysia.
The credit watcher noted that inflation has eased significantly, reaching a six-year low of 0.9 percent in July 2025, supporting robust domestic demand. The government expects full-year 2025 GDP growth in the range of 5.5 to 6.5 percent.
Deft debt management
R&I also highlighted the Philippines’ progress in fiscal consolidation, with the budget deficit falling from 8.6 percent of GDP in 2021 to 5.5 percent in 2025, and projected to narrow further in the coming years. The country’s debt-to-GDP ratio stood at 60.7 percent in 2024, which the agency deemed manageable.
The agency credited the government’s revenue-enhancing measures — such as the VAT on digital services and the CREATE MORE Act — alongside the push for private-sector participation through the Public-Private Partnership (PPP) Code.
“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 Remolona, Jr. said, adding that the BSP continues to bolster the banking system through strong capitalization and prudent risk management.
US tariffs’ limited impact
On the external front, R&I assessed that the impact of the 19-percent reciprocal tariffs imposed by the United States would be limited, given the relatively small share of Philippine exports to the US.
The Philippines also continues to benefit from steady overseas remittances, rising semiconductor manufacturing, and the IT-BPM sector’s expansion, providing resilience to the external sector. Foreign exchange reserves remain sufficient to cover imports and external debt obligations.