S&P lifts sovereign ratings on the Philippines: Outlook stable

SINGAPORE - Standard & Poor's has raised its long-term sovereign credit ratings on the Philippines to 'BBB' from 'BBB-', and its short-term rating to 'A-2' from 'A-3', with the outlook stable. S&P also lifted its ASEAN regional scale rating for the Philippines to 'axA/axA-2', from 'axA-/axA-2', and its transfer and convertibility assessment to 'BBB+' from 'BBB'.

“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. “In turn, we believe the resulting gains in Government revenue generation, spending efficiency, and improvements in the public debt profile and investment environment will at least be preserved in the medium term under the next Administration.
“This is based on our assessment that even though a 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.”
S&P said its ratings on the Philippines also reflect the country's strong external liquidity and international investment position, combined with an effective monetary policy framework relative to the country's income level. “he Philippines has sustained low inflation and low interest rates. These rating supports are weighed against a relatively low income level and fiscal constraints owing to a narrow revenue base and a shortage of basic infrastructure and Government services,” the agency said. www.standardandpoors.com (ATI).