By Joann Santiago
MANILA, April 24 (PNA) – Standard&Poor’s (S&P) on Friday maintained its investment grade rating of ‘BBB’ with “stable” outlook for the Philippines after noting that strong fundamentals will enable the economy to continue to post robust growth.
This rating, the second level after junk status, was given by the debt watcher to the Philippines in May 2014.
In a statement issued April 24, 2015, S&P identified the country’s strong external payments position, improved fiscal situation, stable financial system, within-target inflation, strong domestic consumption and young labor market as the drivers behind its decision to keep the country’s ratings.
“The ratings on the Philippines reflect our assessment of its strong external position, which features rising foreign exchange reserves and a low external debt burden,” it said.
The ratings agency also anticipates that surpluses in the country’s current account position will continue at an average of 4.7 percent annually until 2019.
It forecasts the government’s budget gap to account to only about one percent of gross domestic product (GDP) from this year to 2019, an improvement from the two percent target of the government, which is also the budget deficit’s actual share on domestic output from 2010-14.
S&P first upgraded the country to investment grade status in May 2013 after noting the sustained rise of the country’s external payments position, improvement of the country’s international investment position and effective monetary policy framework.
In May 2014, it further upped its ratings on the country due to reforms put in place by the Aquino administration.
Aside from S&P, Moody’s Investors Service also gives the Philippines an investment grade rating of a notch above the minimum at ‘Baa2’.
Meanwhile, Fitch Ratings gives the country a ‘BBB-‘ rating, the first level of investment grade status. (PNA)