Philippine Airlines gets top Fitch sub-investment grade debt rating

Insider Spotlight

• Fitch assigned Philippine Airlines its first-ever BB long-term issuer default rating with a stable outlook.
• The rating remains below investment grade, though it sits at the highest end of the speculative-grade scale.
• PAL's history includes two major restructurings, including a Chapter 11 bankruptcy process in 2021.

Philippine Airlines (PAL) welcomed Fitch Ratings' assignment of a first-time BB long-term issuer default rating with a stable outlook, marking a milestone for the carrier as it seeks to reinforce investor confidence following years of financial restructuring.

The BB rating reflects Fitch's assessment of PAL's business profile, financial position and operating performance, according to the airline. Fitch cited the carrier's diversified route network, liquidity position, competitive cost structure, prudent fleet expansion plans and operational discipline following its restructuring.

Why it matters

The rating provides an independent assessment of PAL's financial standing after emerging from a court-supervised Chapter 11 restructuring in late 2021. While the designation is a positive development for the airline, BB remains below investment grade and is classified as speculative.

The rating is nevertheless the highest category within speculative-grade debt and places PAL one notch below investment-grade status.

"We welcome Fitch Ratings' assessment of Philippine Airlines and view it as recognition of the progress we have made in strengthening our business, financial and operational fundamentals," Philippine Airlines president Richard Nuttall said in a statement on Monday, June 15, 2026.

"We remain focused on maintaining financial prudence while delivering world-class excellence and elevating the experience we provide to our customers at every stage of their journey," he added.

Between the lines

The rating comes with important historical context. PAL has undergone two major financial restructurings in its history, including a bankruptcy-related rehabilitation during the 1997 East Asian financial crisis and its more recent Chapter 11 filing in the United States during the Covid-19 pandemic.

Against that backdrop, the BB assessment suggests Fitch sees meaningful improvement in the airline's credit profile while remaining cautious about the risks associated with the cyclical aviation sector and PAL's past credit events.

Fitch said the stable outlook reflects expectations that PAL will maintain prudent financial management while pursuing measured growth, supported by adequate liquidity and improving credit metrics over the long term.

PAL said it continues to invest in fleet modernization, customer experience upgrades and operational initiatives aimed at improving efficiency, strengthening connectivity and supporting the Philippine tourism sector.

— Edited by Daxim L. Lucas