Budget Secretary Amenah Pangandaman announced on Wednesday that the Philippines is aiming for an 'A' credit rating.

During a budget hearing with the Development Budget Coordinating Committee (DBCC), she said that cooperation across all government agencies will be crucial for reaching this credit rating objective.

In June, Fitch confirmed the Philippines' 'BBB' investment-grade credit rating and maintained a stable outlook.

The 'BBB' rating indicates a low risk of default and a sufficient ability to meet financial obligations, though adverse economic conditions could potentially impact this capacity.

Whereas the “stable” outlook implies that there is a low probability of a rating change within the next one to two years.

Other leading credit rating agencies, including S&P and Moody's, have also maintained their investment-grade ratings for the Philippines, ABS CBN News reports.

A higher credit rating would enable the country to borrow from international lenders at a lower cost. To achieve such an upgrade, however, the Philippines needs to sustain annual growth of 6% to 7% and consistently reduce its deficit over the next four years.

The DBCC anticipates that the deficit will steadily decrease from 5.6% of GDP in 2024 to 3.7% of GDP by 2028.

In addition, the debt-to-GDP ratio is projected to drop from 60.6% in 2024 to 56.0% in 2028.

Furthermore, as of the end of June, the national government's total outstanding debt had risen to PHP 15.48 trillion, marking an increase of PHP 135.90 billion from May. 

The Bureau of Treasury attributed this rise to both higher government borrowings and the depreciation of the peso against the US dollar.

In Q2 2024, the Philippine economy grew by 6.3%, driven by a surge in construction activities.