MANILA -- Fitch Ratings said Friday it lowered its outlook for the Philippines to "stable" from "positive" citing uncertainty over the COVID-19 pandemic, keeping the nation's credit score at one notch below what would be its first ever A rating.

The outlook downgrade reflects the "deterioration" in the country's near-term macroeconomic and fiscal outlook while the retention of the BBB rating highlights its fiscal and external buffers, Fitch said.

A stable outlook means the credit score will be retained while a positive outlook means a government or debt issuer is under evaluation for a ratings upgrade. The highest in the B tier, BBB, means risk of default is low and capacity to pay is adequate.

The Philippines gross domestic product unexpectedly contracted by 0.2 percent in the January to March period and is expected to worsen in the succeeding quarter as Metro Manila and other urban centers remained on lockdown until May 15 at least.

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Fitch said the Philippine economy could contract by 1 percent this year, from 6-percent growth in 2019.

"The 2020 forecast is uncertain and subject to considerable downside risks depending on how the virus runs its course globally and domestically and the possibility of a further extension or re-imposition of lockdown measures," it said.

The Philippines is rated at investment grade on all 3 major debt-watchers: Fitch Ratings, Moody's Investor Service and S&P.

In a reflection of the investment grade score, the Philippines on April 28 sold $2.35 billion (P119 billion) in global bonds at the lowest ever interest for its 10-year and 25-year notes.

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Since the lockdown, the Bangko Sentral ng Pilipinas has slashed 100 basis points off the benchmark interest rate, trimmed 200 basis points from banks' reserve ratio requirement and authorized the purchase of P300 billion in government securities.

"Structural reforms and sound economic management over the years have provided us with monetary and fiscal space to safeguard lives and support livelihoods at this critical time," BSP Governor Benjamin Diokno said.

The Philippines is in a "good fiscal position to deal with the unprecedented challenges," said Finance Secretary Carlos Dominguez.