S&P raises Philippines outlook to ‘positive’

MANILA, Philippines–Standard and Poor’s raised its outlook on the Philippines’ credit rating to “positive” from “stable” on Thursday, boosting the prospects of a long-sought investment-grade rating as early as next year.

“In our view, the current administration possesses a level of legitimacy, support and stability that reduces political uncertainty and allows for improved legislative efficiency,” credit analyst Agost Benard said.

Benard said this environment allowed the government to focus its efforts on improving its revenues, building infrastructure and reducing poverty.

Manila’s credit rating may be raised from “BB+” to investment-grade next year if the government can build up its coffers to allow it to reduce its debts and make the country more attractive to investors, he added.

The US rating outfit said in a statement it was affirming the Philippines’ credit rating of “BB+”, just one rung below investment grade for the country which has shown surprising economic growth in recent months.

Finance Secretary Cesar Purisima quoted President Benigno Aquino as saying: “This outlook upgrade is another example that good governance is good economics.”

S&P raised the Philippines’ foreign currency credit rating to within one rung of investment grade in July, with Moody’s Investors Service following suit in October.