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Banks (Finance)

Japan Credit Rating Agency Affirms Philippines' Investment-Grade Credit Rating

Strategic Insights

— 1 min read

The Philippines' robust economy, strong banking system, and sound policies have been recognized by the Japan Credit Rating Agency (JCR) as key factors contributing to the country's sustained investment-grade credit rating. In its latest report, JCR highlighted the Marcos Jr. administration's efforts to achieve fiscal consolidation, infrastructure development, and poverty reduction, which have led to steady progress. The agency also commended the Philippine banking system for its strong loan growth, lower non-performing loan ratio, and high capital adequacy ratios.

Key Takeaways:

  • The Philippines' investment-grade credit rating of 'A-' with a 'stable' outlook reflects low credit risk, which helps lower borrowing costs, allowing the government to allocate more resources for socially beneficial programs.
  • The country's high and sustainable economic growth, supported by solid domestic demand, low external debt, and resilience to external shocks, are key factors behind the sustained investment-grade credit rating.
  • The government's policies, including fiscal consolidation and infrastructure development, have led to steady progress and have maintained strong economic growth.
  • The Philippine banking system has shown strong loan growth, a lower non-performing loan ratio (3.1% as of end-July 2025 from 3.6% in 2021), and high capital adequacy ratios (16.5% on a consolidated basis).
  • The country's inflation rate has eased, averaging 1.7% during the first eight months of the year, and the gross international reserves (GIR) reached USD 105.9 billion in end-August 2025.
  • The GIR is equivalent to 7.2 months' worth of imports and 3.4 times the country's short-term external debt.
  • The Philippines' solid foreign currency liquidity position will enable it to remain resilient against external shocks.

Statistics:

  • Investment-grade credit rating with a 'stable' outlook: 'A-' with a stable outlook as of June 2025 (JCR)
  • Low credit risk, with an average borrowing cost reduction (Philippines News Agency)
  • Steady progress in fiscal consolidation, infrastructure development, and poverty reduction under the Marcos Jr. administration (JCR)
  • Strong loan growth: 16.5% capital adequacy ratio on a consolidated basis (BSP)
  • Low non-performing loan ratio: 3.1% as of end-July 2025 (BSP)
  • Inflation rate: 1.7% average during the first eight months of the year (JCR)
  • Gross international reserves: USD 105.9 billion as of end-August 2025 (JCR)
  • Foreign currency liquidity position: solid, enabling resilience against external shocks (JCR)

Sources:

  • Japan Credit Rating Agency (JCR)
  • Bangko Sentral ng Pilipinas (BSP)
  • Philippines News Agency

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