S&P Global Ratings has affirmed the Philippines' sovereign credit rating at "BBB+/A-2" but revised its outlook to stable from positive, citing external pressures from the Middle East conflict.

The rating agency noted that higher energy prices and disruptions to global supply chains are expected to widen the country's current account deficit, while a slowdown in public infrastructure spending is dampening growth. Despite these challenges, S&P expects the Philippines to maintain healthy economic expansion, with fiscal deficits gradually narrowing over the next two years.

The stable outlook reflects confidence in the government's medium-term fiscal framework, robust remittance inflows, and steady foreign investment, which together support external and financial stability.

S&P cautioned that a significant erosion of long-term growth or persistently large current account deficits could trigger a downgrade, while faster fiscal consolidation and narrowing deficits could provide upside potential.

The agency projected GDP growth of 5.8% for 2026, with inflation likely to stand at 3.4%, and highlighted that ongoing reforms and infrastructure investment should underpin medium-term productivity gain, the release said.