Fitch Ratings Retains Philippines’ Investment Grade Rating with Stable Outlook
Debt watcher Fitch Ratings has decided to maintain the Philippines’ investment grade status with a “stable” outlook, highlighting the country’s strong medium-term growth potential.
Fitch Ratings is optimistic about the country’s economic growth, forecasting a 5.8 percent expansion in 2024, an improvement from the 5.5 percent growth seen in the previous year. However, challenges like the effects of the El Niño and La Niña climate phenomena could hinder this growth.
Despite concerns about a possible wider budget deficit due to increased public spending for growth acceleration under the Marcos administration, Fitch Ratings chose to uphold the Philippines’ triple-B rating. This rating signifies lenders’ confidence in the country’s ability to meet its financial obligations and sustain economic growth.
The “stable” outlook indicates a low probability of a credit rating change in the next one to two years, according to Fitch Ratings.
Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. welcomed the rating, praising the central bank’s efforts to control inflation and its data-driven approach to monetary policy. Fitch Ratings anticipates that inflation will remain within the government’s target range despite potential rate cuts later in the year.
Budget Secretary Amenah Pangandaman also expressed satisfaction with Fitch Ratings’ affirmation of the country’s investment grade status, emphasizing the importance of sustaining growth momentum to remain one of the fastest-growing economies in Southeast Asia.
