Fitch Ratings has changed the outlook on the Philippines' long-term foreign currency issuer default rating to negative from stable while maintaining the rating at BBB, according to a recent release.
The outlook revision stems from heightened risks to the country's solid medium-term growth trajectory, including disruptions to public investment and greater exposure to the global energy shock, Fitch said.
The country's growth performance could weaken compared to peers, given more elevated post-pandemic government debt and a gradual erosion in its external finance position, according to Fitch.
The rating agency estimates GDP growth to remain below recent rates at 4.6% this year, given a gradual recovery in public capex and increased energy costs that impact household consumption.
The country has high exposure to the Middle East conflict due to its dependence on energy imports and a likely tempering of remittances from the region, Fitch said.
The affirmation considers Fitch's view of a robust medium-term GDP growth despite increasing risks, leading to a gradual reduction in government debt.
Material changes in the confidence level for a strong, medium-term economic growth and adherence to sound economic policies, government debt-to-GDP ratio, governance standards, or external position could lead to future rating actions.