MANILA – Standard & Poor’s (S&P) maintains its investment grade rating on the Philippines after noting that risks on the domestic economy remain balanced.
To date, the debt watcher gives the country a “BBB” rating with ‘stable’ outlook.
In a research note, S&P said the outlook balanced the country’s strong external position with the low income situation and developing institutional and governance framework in the next 18 months.
An upgrade may be considered if the credit rater sees more institutional and structural reforms than can increase investment and economic growth prospects.
Another positive factor is when “changes in governance and the policy environment lead us to a better assessment of institutional and governance effectiveness.”
On the other hand, a downgrade may happen “if the administration’s reform agenda stalls or if a successor administration reverses recent gains in the Philippines’ fiscal and external positions,” it said.
The debt watcher raised the country’s credit rating to investment grade in May 2013 after noting the country’s strengthening external profile, slowing inflation rate, and the government’s less reliance on foreign-denominated debt. pna
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