Metro Manila, Philippines – Malacañang downplayed Fitch Ratings’ revision of the Philippines’ outlook from “stable” to “negative,” saying it does not mean an immediate downgrade of the investment-grade rating.
Communications Undersecretary Claire Castro said the government remains confident in the economic fundamentals despite rising global risks.
“The negative outlook does not mean a downgrade is imminent,” Castro said during a press briefing, citing information from the Department of Finance.
She added that Fitch itself acknowledged the government’s proactive response to global challenges, particularly the energy crisis.
“Measures such as expanding the policy toolkit and implementing fuel-saving strategies demonstrate agile and responsible economic management,” Castro said.
Fitch flags rising risks
Fitch Ratings earlier revised the Philippines’ outlook to “negative” while maintaining its ‘BBB’ investment-grade rating, citing risks from slowing public investment and exposure to the global energy shock.
A negative outlook signals a higher likelihood of a downgrade within one to two years if economic conditions worsen.
The credit rating agency said disruptions in infrastructure spending — partly due to investigations into alleged irregularities in flood control projects — have weakened economic momentum.
Fitch also warned that the country’s heavy reliance on imported oil makes it vulnerable to rising energy prices linked to tensions in the Middle East.
Growth, inflation concerns
The group projected Philippine economic growth to slow to 4.6% in 2026, below the government’s target, as higher fuel costs and weaker investment weigh on the economy.
Inflation is also expected to rise to 4.1%, which could dampen consumer spending and overall economic activity.
Fitch added that the country’s external position may weaken, with the Philippines projected to become a net foreign debtor by 2026 due to sustained current account deficits.
Despite these concerns, the Palace said investor confidence is strong.
“The Philippines continues to enjoy strong access to global capital markets supported by a diversified investor base and sustained demand for its issuances,” Castro said.
She said economic policies and reforms support long-term growth and stability.
