MANILA, Philippines - Credit rating agency Standard & Poor's on Friday reaffirmed its sovereign rating for the Philippines, adding that strong remittance flows and its outsourcing businesses will continue to keep the country's current account balance in surplus.
S&P has assigned a foreign currency rating of 'BB/B' and a local currency rating of 'BB+/B', two notches below investment grade. The outlook remains stable, the agency said.
"The rating on the Philippines is constrained by the country's relatively low income level, weak fiscal profile, and high, albeit improving, public sector debt and interest burden," S&P's credit analyst Agost Benard said in the statement.
"The stable outlook reflects our expectation that remittances will continue to drive current account surpluses, while the weak fiscal profile will take more effort to address," he added.
S&P said it may raise the Philippines' rating on "material progress in achieving sustainable structural revenue improvement or further strengthening of the external balance sheet."
S&P last raised the Philippines' rating in November 2010. Its rating is the same as Moody's Investors Service's, but one notch below Fitch Ratings'. Fitch upgraded last month its rating for the Philippines to within a notch of investment grade, putting it on par with neighboring Indonesia. - With a report from Reuters