On February 13, 2020, Fitch Ratings announced an upgrade for the Philippines, moving the country’s outlook to “positive” or “BBB.” The change brings the nation closer to the coveted “A” rating. According to Fitch’s Associate Director of Asia Pacific Sovereigns, Sagarika Chandra, the Philippines possesses a “very strong” macroeconomic story that has remained intact, and the government’s infrastructure program continues to stay on track.
The Philippine economy has shown solid performance in recent years, with gross domestic product growth averaging more than six percent. This expansion has been fueled by a growing services sector, a rebound in agriculture, and a surge in construction activity. The government’s infrastructure program, which includes high‑profile projects such as new roads, bridges, and airports, has also contributed to the upward momentum.
Sagarika Chandra noted, “The macro story of the Philippines is very strong and it has stayed intact. Also, to add the infrastructure program of the government that still remains on track.” She added that Fitch expects the Philippines to maintain its strong performance on the macroeconomic front and to strive to lessen its debt‑to‑GDP ratio in order to achieve the A‑level credit rating.
The rating upgrade carries tangible benefits for the economy. A higher credit rating can lead to lower interest rates on loans, making credit more accessible for businesses and individuals. This, in turn, can stimulate increased investment, domestic expansion, and job creation.
Finance Secretary Carlos Dominguez III commented, “The Philippines looks forward to the further alignment of its credit ratings to its level of creditworthiness as indicated by a decreasing debt‑to‑GDP ratio and positive economic prospects from record investment levels in infrastructure and human capital.” He also stated that the government has been working to improve domestic fundamentals through investment initiatives and maintained fiscal discipline.
The upgrade is viewed as a major achievement in the government’s ongoing effort to bolster the country’s credit standing. Fitch forecasts growth rates of 6.4 percent for 2020 and 6.5 percent for 2021. The infrastructure program is expected to continue driving expansion, with several major projects slated for completion in the coming years. Additionally, the growing services sector—particularly business process outsourcing and tourism—is anticipated to contribute to economic growth.
Economic leaders in the Philippines aim to attain the A‑level credit rating before President Rodrigo Duterte’s term concludes in 2022. Reaching that goal will require sustained fiscal discipline and a continued reduction in the debt‑to‑GDP ratio. The government’s efforts to improve domestic fundamentals, combined with the strong economic foundation, position the Philippines well for continued growth and development.
Overall, the credit rating upgrade reflects the government’s work to strengthen the economy and fiscal discipline. With a robust economy and an improving credit rating, the Philippines is well placed to attract further investment, generate jobs, and remain one of the leading economies in Southeast Asia.
