S&P upgrades Philippines

Standard & Poor's said it raised the sovereign credit ratings on the Republic of the Philippines to BBB-/A-3 from BB+/B.

The agency also said it raised the long-term Asean regional scale rating on the Philippines to axA- from axBBB+, along with the transfer and convertibility assessment to BBB from BBB- and affirmed the Asean regional scale short-term rating of axA-2.

The outlook is stable.

The upgrade reflects a strengthening external profile, moderating inflation and the government's declining reliance on foreign-currency debt, S&P said.

The agency said it expects the country to move into a near-balanced external position because of persistent current account surpluses.

The current and previous administrations improved fiscal flexibility through restraining expenditures, reducing the share of foreign-currency debt, deepening domestic capital markets and more recently through modest revenue gains, S&P said.

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