Enhanced trust in Philippine investments following Moody's favorable assessment
In a positive turn of events, Moody's, a renowned credit rating agency, affirmed the Philippines' Baa2 rating with a stable outlook in August 2024. This affirmation came after a thorough analysis of the country's economic performance.
The Philippines' economy has shown remarkable resilience, with the GDP rising by 5.4% year-on-year in the first half of 2025. This growth aligns with the 5.7% full-year forecast and falls within the government's target range of 5.5 to 6.5%.
Moody's has emphasised the Philippines' growth momentum, attributing it in part to sustained inflows from overseas Filipino workers. Cash remittances increased by 3.1% to $16.75 billion in the same period.
The country's reserves and policy space have given the economy a strong buffer, as stated by Bangko Sentral ng Pilipinas Gov. Eli M. Remolona Jr. The Philippines' gross international reserves, amounting to US$105.4 billion as of end-July 2025, are 3.4 times the country's short-term external debt. This robust reserve provides a significant cushion, allowing the Philippines to absorb external shocks and maintain stability even in times of global uncertainty.
The reserves are enough to cover 7.2 months of imports, further underscoring the country's financial strength. Moody's has given a positive assessment of the Philippines' external financing capacity, highlighting the resilience of the economy against global capital flow volatility.
The lower borrowing costs, a direct result of the investment-grade rating, provide more fiscal room for the government to fund infrastructure and social programmes that foster long-term growth. Analysts have stated that maintaining an investment-grade rating lowers credit risk and reduces borrowing costs for the government.
While the institution that approved the Philippines for a loan with favourable terms after a successful creditworthiness assessment in 2025 is not explicitly mentioned, the positive review by Moody's underscores the Philippines' strong economic position. The exact period during which the subsequent loan will be disbursed is not yet clear.
In conclusion, the affirmation of the Philippines' Baa2 rating by Moody's, coupled with the robust economic indicators, points to a promising future for the Philippines' economy. The country's resilience and growth momentum are evident, and the lower borrowing costs offer opportunities for investment in infrastructure and social programmes that will drive long-term growth.
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