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MANILA -- Fitch Ratings said Wednesday it raised its outlook on the Philippines due to its "very strong" macroeconomic story, which it needs to sustain its first ever A credit rating.

The debt watcher upgraded the Philippines' outlook to "positive" from "stable," meaning its current "BBB" rating, or one notch below "A," could be upgraded once certain criteria are met.

An "A" rating widens the market for Philippine bonds and will allow the country to borrow at lower interest. The outlook determines the direction of the rating or credit score.

Fitch and S&P both rate the Philippines at one notch below the minimum "A" score.

"The macro story of the Philippines is very strong and it has stayed intact. Also, to add the infrastructure program of the government that still remains on track," said Sagarika Chandra, associate director of sovereigns team at Fitch Ratings.

"Looking at these factors together, it's a credit that's moving at the right direction," she told ANC's Market Edge.

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The Philippines needs to continue its "strong performance" in the macroeconomic front and further bring down its debt to GDP ratio to merit a rating upgrade to "A," Chandra said.

The COVID-19 outbreak, which stalled travel in and out of China, will have less impact on the Philippines compared to its neighbors since tourism contributes just 3 percent to its economy, she said.

Ongoing reviews of government contracts is unlikely to discourage foreign investors, but Fitch is monitoring developments, she said.