Moody's Investors Service Upholds Philippines' Baa2 Credit Rating, Strengthening Economic Outlook
Finance Secretary Frederick D. Go has expressed approval for the favorable evaluation by Moody's Investors Service regarding the Philippines, emphasizing that the nation's robust credit standing enhances investor trust and fosters ongoing economic expansion.
Key Factors Behind Moody's Positive Assessment
In a report issued on February 12, 2026, Moody's confirmed the Philippines' Baa2 credit rating, highlighting several critical strengths. The agency pointed to the country's solid macroeconomic foundations, a well-established regulatory environment, and a durable financial system as primary contributors. This rating underscores the Philippines' consistent access to both domestic and international funding avenues, a stable banking industry, and sufficient foreign exchange reserves to mitigate global economic fluctuations.
Secretary Go, in an official statement, remarked that this assessment validates the government's commitment to fiscal prudence and structural reforms under the leadership of President Ferdinand Marcos Jr. He added that the Department of Finance will continue to advance strategic investments and initiatives aimed at boosting revenue streams.
Growth Projections and Fiscal Consolidation Efforts
Moody's anticipates that the Philippines will sustain resilient economic growth compared to other regional nations, driven by robust household spending, steady remittances from overseas Filipino workers, increased public infrastructure expenditures, and ongoing structural adjustments. The credit rating agency also observed that fiscal consolidation is progressing as planned, with the deficit expected to decrease from 5.6 percent of gross domestic product in 2025 to 4.3 percent by 2028. This reduction is attributed to enhanced revenue collection methods and more efficient allocation of public funds.
Implications for Borrowing Costs and Future Prospects
A stable credit rating plays a crucial role in maintaining manageable borrowing expenses for both the government and private enterprises, which in turn reinforces investor sentiment and encourages capital inflows. Moody's emphasized that continuing with reform efforts and promoting consistent investments from both public and private sectors could further improve growth opportunities and potentially lead to a future upgrade in the country's credit rating.
