The Philippines continues to have strong economic fundamentals and the country’s fiscal positions remains sound, the Bangko Sentral ng Pilipinas (BSP) and the Department of Finance (DOF) said.
The BSP and DOF made the statement following Fitch Rating’s decision to affirm the Philippines’ “BBB” investment-grade credit rating.
Fitch however revised the outlook from “stable” to “negative.”
In a statement late Monday, the BSP said the outlook revision reflects changes in the balance of risks surrounding the rating, amid global energy shocks.
An investment‑grade rating signals low credit risk and continued access to affordable financing, supporting government spending on priority programs.
A negative outlook underscores the need to address emerging risks affecting the country’s credit profile.
The BSP said that based on Fitch’s definition, revision in the outlook does not imply a rating change is inevitable.
“The economy remains in a good position because growth is strong and banks are in good shape. The BSP is closely monitoring the impact of higher oil prices and geopolitical developments, particularly the conflict in the Middle East, on inflation and the overall Philippine economy, ” BSP Governor Eli Remolona Jr. said.
Remolona said that while recent oil price pressures are driven by global supply shocks, the BSP remains vigilant against spillover effects and the risk of de‑anchoring inflation expectations.
He said the BSP stands ready to act in a measured, timely, and data‑driven manner.
In a separate statement, Finance Secretary Frederick Go said the revised outlook was caused by the external geopolitical shock coming from the Middle East.
“The affirmation of our rating reflects our strong economic fundamentals and sound fiscal position,” said Go.
“The Philippine economy remains on solid footing with a robust domestic market, stable financial system, and recognized reforms,” he added.
Fitch recognized the government’s proactive response to the energy crisis, including the declaration of a National Energy Emergency in March.
It cited the Philippines’ strong track record of policy continuity and economic reforms, which could help mitigate risks to the medium‑term outlook.
Fitch said the country’s foreign exchange reserves also remain adequate to manage current external pressures.
As of end‑March 2026, gross international reserves stood at USD106.6 billion, equivalent to 7 months’ worth of imports and about 3.9 times short‑term external debt based on residual maturity. (PNA)
