S&P lifts Philippines outlook to ‘positive’, ratings affirmed at BBB/A-2

SINGAPORE - S&P Global Ratings has revised its outlook on the Philippines’ long-term sovereign credit rating to positive from stable, at the same time affirming its 'BBB' long-term and 'A-2' short-term ratings. The transfer and convertibility (T&C) assessment was unchanged at 'BBB+'.

“The positive outlook reflects our view that improvements to the Philippines' policymaking settings could support a track record of more sustainable public finances and balanced growth over the next 24 months,” S&P said.
 
“We may raise the ratings if the Government's fiscal reform programme leads to further achievements over the next 24 months. This would support more sustainable public finances and balanced economic growth prospects while maintaining stable fiscal deficits and net general Government indebtedness.
 
“We may also raise the ratings if the Government's revenue enhancement measures lead to lower-than-expected deficits, which would have a knock-on effect on net general Government indebtedness.”
 
S&P also said it could revise the outlook to stable if the reform agenda stalls, if the recalibrated fiscal programme leads to higher-than-expected net general Government debt levels, or if it deems that policymaking settings have otherwise regressed against S&P’s expectations.
 
“The ratings on the Philippines balance our assessment of its strong external position and limited general Government indebtedness against its lower-middle income economy and pressing infrastructure needs.
 
“The Philippines government is enacting increasingly effective fiscal policies, marked by improvements to the quality of expenditure, still-limited fiscal deficits, and low levels of general Government indebtedness. At the same time, the economy continues to achieve consistently robust growth.” www.standardandpoors.com (ATI).