Moody's Investors Service signalled Thursday it was likely to elevate the Philippine government's debt rating to investment-grade, citing the former basket-case nation's robust economic growth and political stability.
Two other major credit rating agencies, Standard and Poor's and Fitch, have already upgraded Philippine government securities to investment-grade earlier this year.
"Moody's Investors Service has placed the Ba1 foreign and local currency long-term issuer and bond ratings of the Government of the Philippines on review for upgrade," the US ratings agency said in a statement.
The next-highest rating on its scale is "Baa3", considered the lowest in the investment-grade ranks.
Moody's said a rating in the "Baa" ranks is "subject to moderate credit risk", while "Ba" rates entail "substantial credit risk".
The Philippines last defaulted on its foreign debt in the early 1980s.
"The Philippines' economic performance has exceeded Moody's expectations; supporting the view that the economy will grow significantly faster than similarly rated peers over at least the next two to three years," it said.
This growth came despite a global economic slump and with no signs that the economy was overheating or facing "imbalances", it added.
It credited the improvement to the reform agenda of President Benigno Aquino, who has put fighting corruption at the fore of his priorities.
Moody's also said an upgrade could come if there is evidence that the government's debt burden will decrease and that investment spending will increase.
The Philippines posted annualised growth of 7.8 percent in the first quarter, the highest in Asia.
Finance Secretary Cesar Purisima said the Moody's announcement showed Aquino's good governance priority was making a difference.
"I am confident that as Moody's continues to evaluate the Philippines they will see that the foundations for sustained, resilient growth have been laid," he said in a statement.
In another development, Philippine monetary authorities decided to keep key rates unchanged on Thursday amid signs that inflation would remain under control while the country's economy continued its "robust" performance.
"The manageable inflation outlook and strong domestic growth support keeping policy settings steady," a central bank statement said.
The overnight borrowing rate remained at 3.50 percent while the overnight lending rate stayed at 5.50 percent, both all-time lows.