Fitch Credit Outlook on PH Credit Upgraded to ‘Stable’

Global credit rating agency Fitch Ratings has upgraded the credit outlook for the Philippines and affirmed its credit rating at “BBB.”

Moreover, the agency revised the outlook on the country’s Long-Term Foreign-Currency Issuer Default Rating (IDR) from “negative” to “stable.”

According to Fitch, the improved outlook reflects its increased confidence that the Philippines is on track to achieve strong medium-term growth following the COVID-19 pandemic.

This positive growth outlook is expected to support sustained reductions in the government debt-to-GDP ratio, which has decreased from 63.5 percent in the first quarter of last year to 61 percent in the first quarter of 2023.

Finance Secretary Benjamin Diokno welcomed the improved outlook, stating that it reflects the country’s robust macroeconomic fundamentals.

Diokno cited the strong growth performance of the Philippine economy, which recorded 7.6 percent growth in 2022 and 6.4 percent in the first quarter of 2023.

Fitch projects that the Philippine economy will continue to grow above 6% over the medium term, surpassing the median growth rate of 3 percent for countries in the “BBB” rating category. The agency also affirmed the country’s credit rating of “BBB,” which indicates a low expectation of default risk and adequate capacity for payment of financial commitments.

Maintaining a credit rating within the “BBB” category is significant as it denotes that the Philippines retains its status above the minimum investment grade. (GFB)