MANILA - Fitch Ratings has assigned an investment grade 'BBB' rating to the Philippines' planned issuance of US dollar and euro bonds. 

An investment grade rating means better terms and lower interest rates for a borrower as there is less risk of debt default.

The debt watcher said the rating is in line with the Philippines' 'BBB' Long-Term Foreign-Currency Issuer Default Rating (IDR) with a stable outlook and was last affirmed in June this year.

Fitch Ratings however also said that bonds' rating may change depending on changes in the Long-Term Foreign-Currency IDR, which can be affected by several factors.

The rating may be downgraded if there is reduced confidence in the Philippines' strong, stable medium-term economic growth and continued adherence to sound economic policies.

Failure to maintain a stable government debt-to-GDP ratio, and a significant deterioration in foreign-currency reserves and the country's net external debt position, may also lead to ratings downgrade.

However, the rating may also be upgraded if the Philippines outperforms growth forecasts, reduces its debt-to-GDP ratio, and strengthens governance standards at par with its peers. 

Philippine economic managers are aiming for an upgrade to 'A' level ratings from major ratings agencies like Fitch, Moody's and S&P Ratings. The Philippines recently secured another 'A' rating from a Japan-based debt watcher.