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Philippines gets second credit ratings upgrade


The Philippines received its second investment grade credit rating on Thursday with Standard and Poor's following Fitch in giving an upbeat assessment of the Southeast Asian country's economy.

S&P said the outlook on the Philippines was stable, and raised its rating to BBB- from BB+.

"The upgrade on the Philippines reflects a strengthening external profile, moderating inflation and the government's reliance on foreign currency debt," S&P credit analyst Agost Benard said in a statement.

"We expect the country to move into near-balanced external position because of persistent account surpluses, in which large net transfers from Filipinos working abroad more than offset ongoing trade deficits."

Philippine Finance Secretary Cesar Purisima said the upgrade affirmed the country's "strong economic and fiscal gains" on the back of reforms by President Benigno Aquino.

"This investment grade rating is another resounding vote of confidence on the Philippines," he said.

The upgrade came two months after Fitch Ratings became the first of the three major ratings agencies to give the Philippines an investment grade, also at BBB-.

Moody's has yet to give the country a similar rating.

On Thursday, S&P said the Philippines had worked to improve its fiscal position by restraining expenditures, reducing foreign currency debt, deepening domestic capital markets and improving revenues, while keeping inflation low.

The upgrades mean the government pays lower interest rates on debt and the country will likely attract more foreign direct investment.

The Philippine economy grew 6.6 percent last year from 3.9 percent in 2011, beating forecasts. Its stock market is one of the best performers in the region.