Japan credit rating affirms PH’s A-rating, stable outlook
The Japan Credit Rating Agency Ltd. (JCR) has affirmed the Philippines’ A- rating with a Stable outlook, citing the country’s strong economic fundamentals, resilience to external shocks, and continued fiscal consolidation, the Department of Finance said in an August 28 news release.
In its latest assessment, JCR recognized the Philippines’ high and sustained economic growth potential, supported by solid domestic demand, low external debt, and substantial foreign exchange reserves. These factors reinforce the country’s creditworthiness despite external challenges.
While economic growth has slowed, JCR expects the Philippine economy to recover in the second half of 2026 and return to high growth rates over the medium term.
“JCR’s affirmation of the Philippines’ A- rating and Stable outlook reflects the resilience of our economy and the government’s commitment to fiscal consolidation and long-term reforms. It reinforces investor confidence and supports our efforts to attract investments, create quality jobs, and sustain inclusive growth,” Finance Secretary Frederick D. Go said.
JCR highlighted the Marcos, Jr. administration’s progress in fiscal consolidation, with the deficit-to-GDP ratio narrowing to 5.6% in 2025 from 5.7% in 2024 and government debt-to-GDP settling at 63.2% at end-2025, which the agency described as relatively low among sovereigns rated in the A range.
The country’s strong external position likewise contributed to the affirmation. Current account deficit narrowed to 3.3% of GDP in 2025 from 4.0% in 2024, supported by increased exports of electronic products, steady remittances from migrant workers, business process outsourcing revenues, tourism receipts, and net inflows of direct investments.
External debt remained manageable at 30.3% of GDP at end-2025, while foreign exchange reserves reached US$110.8 billion, equivalent to more than seven months of imports. JCR noted that the Philippines’ foreign exchange liquidity position remains solid and expects the economy to retain high resilience to external shocks.
JCR also cited the government’s efforts to strengthen the investment climate and advance industrial development. It recognized the CREATE MORE Act and its implementing regulations, as well as the government’s push for public-private partnerships to complement public infrastructure investments.
The agency likewise recognized the government’s efforts to promote high-value technology, maximize the potential of domestic mineral resources, and foster advanced manufacturing industries, particularly in semiconductors and electronic components.
The latest affirmation underscores the Philippines’ strong underlying credit fundamentals and resilience to external shocks, while reaffirming the country’s capacity to advance its medium-term fiscal consolidation and economic development objectives.
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