Moody’s affirms Philippines’ Baa2 rating with stable outlook

Moody’s Ratings has affirmed the Philippines' Baa2 long-term local and foreign currency issuer and senior unsecured ratings with a stable outlook. The agency expects the country's fiscal metrics to stabilize in the next two years, driven by a gradual economic growth recovery and the government's fiscal consolidation efforts. Despite facing deteriorating debt affordability, institutional quality constraints, low income levels, and high exposure to physical climate risks, the Philippines maintains strong access to funding markets and sufficient foreign-currency reserves.

The stable outlook acknowledges the balanced risks at the Baa2 level, with potential risks including a prolonged slowdown, pre-election spending pressures, slower reform momentum, or debt affordability deterioration beyond expectations.

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