MANILA - The sovereign credit rating of the Philippines could be upgraded if reforms implemented by Aquino government continue on to the next administration, Fitch Ratings said.
In its 2016 Outlook for Emerging Asia Sovereigns, Fitch said the country is seeing a steady improvement due to strong growth, a structural current account surplus, and ongoing fiscal policy discipline.
"Increased confidence that these trends will be sustained under the next administration after the 2016 presidential elections would support the case for an upgrade," Fitch said in its report.
The debt watcher raised the country’s outlook to positive from stable in September as it affirmed the credit rating at "BBB-" or minimum investment grade due to its strong macroeconomic fundamentals and improved government standards and competitiveness indicators.
"The outlook on Philippines’ ‘BBB−’ rating was revised to positive from stable in September on a steady strengthening in the sovereign balance sheet and in governance indicators," Fitch said.
The country’s credit rating will also be upgraded if gross domestic product (GDP) growth is sustained and if the general government revenue base will be broadened.
Fitch earlier said the country’s GDP will likely grow 5.6 percent this year as domestic demand remains robust even as external demand weakens.
In the third quarter, the country’s GDP growth accelerated to 6 percent from the revised 5.8 percent in the second quarter amid higher government spending and steady domestic demand.