R&I keeps PH’s A- rating, Go says move boosts investor confidence

Insider Spotlight

• Japan's Rating and Investment Information affirmed the Philippines' A- foreign currency issuer rating with a stable outlook.
• Finance Secretary Frederick Go said the decision reinforces investor confidence and supports the country's long-term growth agenda.
• R&I expects fiscal deficits to narrow over the medium term and economic growth to recover as infrastructure spending normalizes.

Japan-based Rating and Investment Information (R&I) affirmed the Philippines' A- foreign currency issuer rating with a stable outlook, citing the country's resilient economic fundamentals, manageable public finances, and stable banking sector despite slower economic growth and delays in infrastructure spending. The agency also maintained the country's foreign currency short-term debt rating at a-1.

Finance Secretary Frederick Go welcomed the rating affirmation, saying it reinforces investor confidence in the Philippine economy and validates the government's efforts to strengthen fiscal management, improve governance, and pursue reforms that support long-term growth.

"R&I's affirmation is a strong vote of confidence in the Philippine economy and in our commitment to sound fiscal management and structural reforms," he said in a statement on Friday, Aug. 21, 2026. He added that sustained investor confidence would help attract investments, create jobs, and enable the government to secure financing on better terms for priority programs.

Why it matters

The affirmation preserves one of the Philippines' highest sovereign credit ratings and supports the country's standing among international investors. A stable investment-grade rating generally helps reduce borrowing costs for both the government and the private sector while improving access to global capital markets.

Frederick Go

The stable credit rating helps improve investor confidence in the country, the Finance chief said.

R&I said the Philippine economy continues to benefit from a diversified industrial base led by tourism, information technology and business process management, and semiconductor manufacturing. Population growth, infrastructure investment, and foreign direct investment remain key drivers of long-term expansion, while the banking sector continues to demonstrate stability.

The big picture

The rating agency noted that economic growth slowed to 4.4 percent in 2025 as stricter validation and governance measures following corruption allegations involving flood control projects delayed infrastructure spending. It expects growth in 2026 to remain below the previous year's pace before recovering to the 5 percent range from 2027 as budget execution returns to normal.

R&I also pointed to the country's manageable external position, supported by steady remittances, adequate foreign exchange reserves, and moderate external debt. While the current account remains in deficit, the agency said this largely reflects investment-related imports that lay the foundation for future growth rather than structural weakness.

The agency expects the national government's fiscal deficit to continue narrowing as tax reforms, including the value-added tax on digital service providers, bolster revenues. Although government debt rose to 63.2 percent of gross domestic product in 2025, R&I said the level remains manageable and should decline over the medium term as fiscal consolidation progresses.

— Edited by Daxim L. Lucas