Phl credit outlook upgraded to positive

S&P Global Ratings has raised the Philippines' credit rating outlook to positive from stable, increasing the possibility of an upgrade in the next 12 to 24 months.

- By KEISHA TA-ASAN

In a report, the New York-based debt watcher affirmed its "BBB+" long-term investment grade rating and "A-2" short-term sovereign credit ratings on the Philippines.

"The positive outlook reflects our improved assessment of institutional and policy settings in the Philippines. This improvement could lead to stronger sovereign support over the next 12 to 24 months if the Philippine economy maintains its external strength, healthy growth rates and that fiscal performance will strengthen," it said.

S&P said it might raise the Philippines' ratings if current account deficits taper off and the government achieves faster fiscal consolidation.

On the other hand, the debt watcher could revise the outlook back to stable if economic growth momentum weakens or if the current account deficit becomes persistent and erodes the country's external balance sheet.

However, S&P believes the Philippines has demonstrated strong economic recovery in the last two years.

"The ratings on the Philippines reflect the country's above-average economic growth potential. This strength underpins constructive development outcomes. The ratings also benefit from the country's strong external position," it said.