MANILA, Philippines—Other major credit-rating firms are expected to follow in Standard & Poor’s (S&P) footsteps and grant upgrades for the Philippines, which has shown its ability to implement and sustain tough reforms.
Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said a fresh round of upgrades would make the country even more attractive in the eyes of foreign investors in the coming months.
The top candidate that is expected to give the Philippines its next credit rating upgrade is Moody’s Investor Service, which has had the country’s sovereign grade on “positive” watch since October 2013.
“The BSP remains positive that the other rating agencies will recognize, just as S&P has, the continued sound macroeconomic fundamentals of the country,” Tetangco said in an e-mail to reporters.
Through policies implemented by fiscal and monetary officials, the country has enjoyed stable consumer prices and a steady stream of robust foreign income, Tetangco pointed out. He said the Aquino administration has also successfully pushed for governance reforms and structural changes that have resulted in significant improvements in the country’s ranking in global competitiveness surveys.
“We believe this recognition would happen sooner rather than later,” he said.
Last Thursday, S&P became the first credit-rating agency to bring the country to two notches above investment grade. The country’s long-term peso and dollar sovereign debt was upgraded to “BBB” from “BBB-.”
Moody’s and Fitch Ratings still have the Philippines at a notch below S&P’s current rating for the country.
S&P raised the Philippines’ credit rating in the belief that reforms were likely to continue beyond the administration of President Benigno Aquino III.
S&P upgraded the Philippines’ foreign long-term debt by one notch to BBB from BBB-, and foreign short-term debt to A-2 from A-3, with a stable outlook, saying the rating reflected the country’s strong external liquidity and investment position and effective monetary policy framework.