FITCH Ratings has kept the Philippines’ credit rating at minimum investment grade.
In a statement, Fitch said it had affirmed the Philippines’ sovereign ratings at BBB- on the back of sustained current account surpluses, declining government debt and budget deficit, favorable macroeconomic growth performance during the last five years as well as stronger governance standards under the Aquino administration.
Fitch also expects the Philippine economy to grow by about 6 percent in 2016 and 2017.
Moving forward, Fitch said it was closely monitoring if “improvement in governance standards can be sustained following a change in government after elections.”
While its rating outlooks remained “positive,” Fitch said ratings could revert to “stable” if the following happen: deterioration in governance standards and/or reversal in reforms implemented under the Aquino administration could be credit negative; and instability in the financial system, possibly triggered by a sustained period of excessive credit growth.
A positive outlook indicates a possible upgrade in credit rating within the next 12 to 18 months.
Fitch’s rating of BBB- for the Philippines has stayed the same since March 2013.
In a statement, Finance Secretary Cesar V. Purisima said this latest announcement by Fitch affirmed “President Aquino’s commitment to good governance.”
However, “we believe that we are still underrated by at least a notch” as “the Philippines continues to outshine similarly rated peer sovereigns amid global volatility,” Purisima added.