Philippines gets BBB+ rating from S&P

The Philippines retains its investment-grade status as S&P Global Ratings affirms its long-term BBB+ and short-term A-2 ratings, while projecting slower growth for the economy this year.

On November 27, 2025, S&P (Standard & Poor’s) index made the announcement as the government temporarily halts key infrastructure projects amid probes into suspected misuse of flood-control funds. The agency noted that the slowdown in public spending could weigh on short-term GDP (Gross Domestic Product) growth but does not threaten the country’s long-term economic path.

The 2025 growth forecast for the Philippines has been cut by S&P to 4.8%, down from a three-year average of 6.3% and under the government’s 5.5–6.5% target. The agency attributed the weaker outlook to halted infrastructure projects, especially the ₱545-billion flood-control programs, 20% of which were awarded to just 15 contractors, prompting President Marcos to call it a “disturbing assessment.”

To address the issue, the government set up the Independent Commission for Infrastructure (ICI) to probe alleged mismanagement and promote accountability in public spending on infrastructure projects.

Despite short-term challenges, S&P highlighted the Philippines’ solid external buffers, steady fiscal consolidation, and low inflation as key factors underpinning its positive outlook. The Bangko Sentral ng Pilipinas (BSP) holds $110.2 billion in international reserves, enough to cover 7.4 months of imports, which is more than twice the IMF’s (International Monetary Fund) recommended level. With inflation averaging 1.7% in October 2025, the BSP has reduced policy rates by 175 basis points since August 2024.

BSP Governor Eli Remolona Jr. expressed support for the rating, noting, “S&P’s affirmation validates our confidence in the country’s favorable long-term economic prospects, and its ability to withstand external risks.”

Finance Secretary Frederick D. Go added that a high credit rating helps reduce the government’s financing costs, allowing for greater investment in essential services. “This contributes to our goal of improving the lives of all Filipinos,” he stated.

S&P projects a medium-term recovery for the Philippines, forecasting an average GDP growth of 6.2% from 2026 to 2028, driven by robust domestic consumption, increased private investment, and ongoing economic reforms. Key measures supporting this growth include the passage of the CREATE MORE Act, which refines tax incentives to attract foreign investment, the liberalization of telecommunications, power generation, and transportation sectors, and the allowance of 100% foreign ownership in renewable energy projects, particularly solar and wind. These initiatives are designed to bolster investor confidence, facilitate business expansion, and create new job opportunities across the country.

On the other hand, S&P warned that ongoing current account deficits or a significant decline in long-term growth could prompt a change in its outlook from positive to stable. The agency also noted that, despite recent protests over infrastructure spending drawing hundreds of thousands of participants, political stability is unlikely to be affected. 

“Policy direction remains consistent, and the government continues to uphold pro-business and pro-growth policies,” S&P stated.

The Independent Commission for Infrastructure (ICI) is set to release its preliminary findings in the near future, which will guide the resumption of paused infrastructure projects and help restore GDP growth momentum. 

In the meantime, the government has rolled out a catch-up plan focusing on high-impact projects to stimulate economic activity and provide essential public services. The reaffirmation of the Philippines’ investment-grade rating highlights the country’s resilient economic fundamentals, offering reassurance to investors while supporting ongoing fiscal discipline and structural reforms.