The Philippines on Thursday received a credit rating upgrade from Standard & Poor’s Ratings Services (S&P), which cited the country’s strong external liquidity and effective monetary policy that has sustained low inflation and interest rates.
In a statement, S&P said it raised the country’s long-term sovereign credit rating to “BBB” from “BBB-” with a stable outlook.
The latest upgrade follows S&P’s rating action in May 2013, when it assigned the Philippines an investment grade rating.
The announcement was welcomed by the Philippine government.
“We are very pleased that S&P has recognized the Philippines’ remarkable economic comeback,” Finance Secretary Cesar Purisima said.
For his part, Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said: “The BSP welcomes the decision of S&P to upgrade the Philippines’ long-term sovereign credit rating by one notch.”
He pointed out that this was a major feat “as S&P did a straight upgrade. They no longer assigned a positive outlook before upgrading the rating.”
In raising the ratings on the Philippines, S&P said: “We expect ongoing reforms on a broad range of structural, administrative, institutional, and governance issues to endure beyond the term of the current administration.”
S&P also expressed optimism that the gains in revenue generation, spending efficiency and improvements in public debt profile and the investment environment will be sustained under the next administration.
Meanwhile, Tetangco stressed that the latest upgrade from S&P “is further affirmation of the country’s strong macroeconomic fundamentals. Since S&P raised the Philippines’ credit rating to investment grade in May 2013, the Philippines proved that it is able to sustain high economic growth despite external volatility.”
The central bank chief added that the rating upgrade “is a recognition that the structural reforms that we have put in place continue to gain traction, as demonstrated by the significant improvements in the country’s position in international governance and competitiveness surveys.”