Global leader Fitch Ratings has affirmed a rating with a positive outlook for the Philippines’ long term foreign and local currency Issuer Default Ratings (IDRs).
The Fitch Ratings grade of ‘BBB-’ with a Positive Outlook was also given to the country’s unsecured foreign and local currency bonds, along with an ‘F3’ rating.
‘F3’rating was also affirmed for the Philippines’ short term foreign and local currency IDRs.
Altogether the Country Ceiling was affirmed at’BBB’.
The credit rating and research group cited the key rating drivers for the Philippines as reflective of its “continued strong and consistent growth performance, a robust net external creditor position and government debt levels that are lower than the median of peers in the 'BBB' rating category.”
Fitch cited the following rating factors:
- The Philippines' strong economic growth is a rating strength.
- The Philippines in May 2016 elected Rodrigo Duterte as its new president.
- The Philippines is a strong net external creditor.
- The Philippine central bank's monetary and exchange rate policies are effective.
- The government's debt remains below the 'BBB' median.
A rating within the 'BBB' category means that expectations of default risk are currently low and the capacity for payment of financial commitments is considered adequate, but adverse business or economic conditions are more likely to impair this capacity.
A positive rating outlook, meanwhile, indicates an upward trend for a credit rating over a one-to two-year period.
Fitch expects the economy to sustain its strong growth momentum, with GDP forecast to increase by 6.8% and 6.7% in 2017 and 2018, respectively. Fitch forecasts inflation to increase to 3.3% in 2017, up from 1.8% at end-2016, but remain within the central bank's target of 2%-4%.