A month after receiving its first investment grade rating from Fitch Group, the Philippines won its second credit rating upgrade, this time from Standard & Poor (S&P).
“The upgrade on the Philippines reflects a strengthening external profile, moderating inflation, and the government’s declining reliance on foreign currency debt,” said S&P credit analyst Agost Bernard.
“We expect the country to move into a near-balanced external position because of persistent current account surpluses, in which large net transfers from Filipinos working abroad more than offset ongoing trade deficits,” he added.
Fitch and S&P’s upgrades lifted the country’s long-term foreign currency-denominated debt from BB+ to BBB-. The firms also assigned a stable outlook, which means this new credit rating will stand for at least six months to a year.
The Philippine government celebrated the news, citing the upgrade as another indication of sustained confidence in the Philippine economy.
“We are very pleased that S&P, along with Fitch, has also now affirmed the Philippines’ strong economic and fiscal gains,” Finance Secretary Cesar Purisima said. He also said that the government will continue to focus on infrastructure development, on creating a larger fiscal space to support social investments, and on further opening up the economy.