JCR cites strong economy, banking sector in affirming Phl credit rating

Japan Credit Rating Agency (JCR) has reaffirmed the Philippines’ investment-grade rating, highlighting the country’s sustainable economic growth and the soundness of its banking system.

In its latest report released Thursday, JCR pointed to robust domestic demand, low external debt, ample foreign exchange reserves, and a stable financial system as key drivers of the country’s “A-” credit rating with a “stable” outlook.

“Through government-led infrastructure projects, the economy has maintained strong growth driven by solid private consumption and fixed capital formation. High growth is expected to be retained over the medium term,” JCR said.

The Marcos Jr. administration’s policies on fiscal consolidation, infrastructure, and poverty reduction were also noted as contributing factors.

Latest data showed universal and commercial banks had a consolidated capital adequacy ratio of 16.5 percent, well above domestic and international standards, while non-performing loan ratio improved to 3.1 percent as of end-July 2025 from 3.6 percent in 2021.

Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. welcomed the assessment, saying the central bank’s policies “promote robust capitalization and sound risk management among banks,” which reinforce financial stability and investor confidence.

JCR also noted easing inflation, which averaged 1.7 percent in the first eight months of the year, and gross international reserves of USD105.9 billion as of end-August—enough to cover 7.2 months of imports and 3.4 times the country’s short-term external debt.

The rating agency said continued progress on fiscal reforms, higher per capita income, poverty reduction, and infrastructure investment would further strengthen the Philippines’ credit standing, while setbacks in reforms could pose downside risks.