Moody’s Ratings has affirmed the Philippines’ investment-grade “Baa2” rating and kept a stable outlook, saying it expects a recovery in economic growth to help steady the country’s finances over the next two years.
In its latest action on Monday, the agency projected growth of 3.6 percent in 2026, picking up to 5.3 percent in 2027. The 2026 figure would be slower than the 4.4 percent recorded in 2025, but it still sits inside the government’s revised target of 3.5 to 4.5 percent.
The forecast lands at an awkward moment for the economy. Growth has been squeezed by higher food and energy prices tied to the conflict in the Middle East, and by a slowdown in government spending after the fallout from the flood-control probe. In the second quarter, output slumped to 2.3 percent, a 16-year low.
Moody’s reads that weakness as temporary rather than structural. The stable outlook signals it does not expect a downgrade in the near term, and the agency tied its call to an anticipated rebound that would keep the government’s debt and deficit metrics on a manageable path.
An investment-grade rating matters in concrete ways. It lowers the government’s borrowing costs and shapes how global investors price Philippine assets, so an affirmation, even a cautious one, removes a source of uncertainty at a point when the domestic numbers have been soft. The message from Moody’s is essentially that the recent slowdown is a dip to be managed, not the start of a slide.
