PHL gets another credit rating upgrade from S&P
Standard & Poor’s Ratings Services gave the Philippines a one-notch credit upgrade to BBB “with a stable outlook” from last rating’s BBB-. This was the highest rating that the country had received so far from any credit rating firm.
“We raised the ratings because we now believe the ongoing reforms to address shortcomings in structural, administrative, institutional and governance areas will endure beyond the current administration,” S&P said.
The credit firm added that in turn, they believe the resulting gains in government revenue generation, spending efficiency, and the improvements in public debt profile and investment environment will at least be preserved in the medium term under the next administration.
“The Aquino administration is committed to strengthen public institutions and build increased capacity among citizens and communities. This is the path that leads to sustained economic growth and the raising of the Filipino people’s quality of life,” Presidential Communications Operations Office Secretary Herminio Coloma Jr. said.
Last May 2013, S&P gave the Philippines an investment grade rating which cited a 7.2-% growth along with the reforms being instituted by the Aquino administration.
S&P said that while a possible change of administration after the presidential elections in 2016 represents some uncertainty for reforms, the risks have shifted toward “maintaining the impetus and direction of the process, away from a potential reversal or abandonment of advances achieved to date.”
The latest upgrade reflects the country’s “strong external liquidity and international investment position” matched by an effective monetary policy framework, the debt watcher added.
Concurrently, S&P also noted that it perceives foreign exchange-denominated earnings will improve further due to rising remittances and the bustling business process outsourcing (BPO) sector.