With $110 billion in foreign reserves, Philippines' investment-grade credit rating reaffirmed by S&P amid 'challenges'

Manila: Amid the on-going probe into a major infrastructure corruption scandal, with officials and involved individuals making they way to jail, the Philippines remains an attractive investment destination.

So stated S&P Global Ratings, which affirmed the Philippines’ investment-grade credit rating.

The ratings agency expects the economic impact of the scandal to be "short-lived", while it projects strong growth prospects for the Asian country.

“A slowdown in public infrastructure investment in the Philippines is weighing on its near-term growth prospects,” S&P said.

“However, we believe this is temporary and economic growth prospects remain strong.”

An investment grade rating provides tangible benefits such as:

These are expected to contribute positively to the nation's development, job creation and the welfare of its people.

The Philippines currently holds a ‘BBB+’ rating with a positive outlook, indicating confidence in the country's long-term economic performance.

S&P projects the country’s economic growth this year to slow to 4.8 percent due to investigations into flood control projects launched in August.

Nonetheless, the agency expects growth to rebound, forecasting gross domestic product (GDP) growth of around 6.2% through 2028, aligning with the government’s target of 6.0 to 7.0% in the last three years of its term.

The “BBB+” sovereign rating is a notch below the “A”-level grade targeted by the government, while a positive outlook means the Philippines' credit rating could be raised within 24 months if improvements are sustained

“The country has a diversified economy with a strong record of high and stable growth. This reflects supportive policy dynamics and an improving investment climate,” S&P added.

The agency also noted ongoing efforts to address infrastructure gaps and implement regulatory and tax reforms that should enhance economic productivity.

While Manila seeks to raise its rating to "A" level, BBB+, with a "positive outlook" means the Philippines' credit rating could be raised within 24 months if improvements, including a definitive resolution to the corruption scandal, are sustained.

S&P emphasised that despite some large but mostly peaceful protests related to the infrastructure probe, it does not expect any destabilising changes in policy.

The Philippine government remains committed to reform agendas that improve the investment climate and strengthen economic performance.

The positive outlook indicates the possibility of an upgrade within 12 to 24 months if fiscal consolidation accelerates and current account deficits improve.

Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. welcomed the affirmation, stating: “It confirms our view of the favourable long-term economic growth prospects.”

He highlighted the country’s robust external position supported by $110.2 billion in gross international reserves (including gold) as of October 2025, a level that is more than many European countries, including Spain, Belgium, Denmark and Sweden.

The BSP also remarked that having an investment-grade credit rating enables the government to borrow at lower interest rates while helping businesses access affordable financing.

“The positive outlook points to a possible rating upgrade within 24 months, which would further lower borrowing costs and boost investor confidence,” the BSP added.

Finance Secretary Frederick Go expressed optimism about the rating affirmation, citing the country’s strong fundamentals and the government’s commitment to fiscal consolidation.

He said: “We will ensure that every policy decision will support sustainable growth and long-term stability.”

Go highlighted the direct benefits to Filipinos, explaining: “Having a high credit rating will benefit Filipinos because this means cheaper financing for the government, and in effect, more resources for essential public services. This supports our goal of uplifting the life of every Filipino.”

Lower borrowing costs

An investment-grade credit rating enables a country to borrow money at lower interest rates since it is viewed by lenders as less risky. This means the government can finance public projects and services more affordably, reducing the burden on taxpayers.

For the Philippines, this translates into cheaper government borrowing costs, which frees up financial resources for much-needed infrastructure and social programmes.

Enhanced investor confidence and access to capital

The rating signals to both domestic and foreign investors that the country’s fiscal management and economic policies are sound. This attracts more foreign direct investment and encourages local businesses to access financing at competitive rates. Increased investment boosts economic growth, job creation, and long-term development.

Economic stability and policy credibility

Maintaining an investment-grade rating reflects a government’s commitment to prudent fiscal policies and a stable economic environment.

It fosters confidence among international partners and markets. For the Philippines, this has helped sustain steady growth, supported reforms, and shielded the country from external shocks, ensuring sustainable economic progress.

The Philippines' investment-grade rating affirms its resilient economic prospects despite short-term challenges, such as bad infrastructure due to systematic corruption, which has now come to light.

It provides tangible benefits such as lower borrowing costs, stronger investor confidence, and greater economic stability, all of which contribute positively to the nation's development and the welfare of its people. ​