Fitch Ratings on Wednesday upgraded Philippines' credit ratings to investment grade, and maintained the 'stable' outlook, citing the country's strong and resilient economic growth in the past five years. It is the first time the Philippine economy has been upgraded to investment grade.
Fitch upgraded Philippines' main sovereign credit rating to +'BBB-' from 'BB+', and revised up the Long-Term Local-Currency Issuer Default Rating to 'BBB' from 'BBB-'. The Outlooks on both ratings are Stable. The Short-Term Foreign-Currency IDR was upped to 'F3' from 'B'.
Fitch forecasts that the Philippine economy will expand 5.5 percent in 2013. A rising import bill stemming from strong domestic demand would lead to a narrower current account surplus, and stabilize the net external creditor position at a strong level through to 2014, the agency said.
Improvements in fiscal management have made general government debt dynamics more resilient to shocks. The economy has also been benefited by favorable funding conditions to lengthen the average maturity of debt, Fitch said.
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