International debt watcher Fitch Ratings revised its credit outlook for the Philippines to “positive” from “stable,” signaling its intention to grant an upgrade within the next 12 to 18 months.
Sovereign credit ratings, which are indications on the government’s ability to repay obligations, are used by investors as proxies for the strength and stability of the local economy.
Fitch’s move was in recognition of improved governance standards under the Aquino administration, which has led to stronger growth, and improvements in the government’s finances and the domestic business climate.
Fitch said it would withhold a credit rating upgrade if it sees a “deterioration in governance standards or a reversal in reforms that were implemented under the Aquino administration.”
The rating firm currently rates the Philippines at its minimum investment grade, while Moody’s Investor Service and Standard & Poor’s have similar credit scores for the country at two notches above “junk.”