Fitch revises PHL credit rating outlook to positive

Fitch Ratings has upgraded the Philippines' credit rating outlook to positive from stable, indicating a potential rise to an "A" level, and affirmed the country's long-term foreign-currency issuer default rating at "BBB".

This revision is attributed to the Philippines' sound macroeconomic policies, fiscal reforms, moderate inflation, and an improved Ease of Doing Business ranking.

Economic officials, including Finance Secretary Carlos G. Dominguez III, Socioeconomic Planning Secretary Ernesto M. Pernia, and BSP Governor Benjamin E. Diokno, lauded the decision, citing the country's improved macroeconomic fundamentals and strong spending on infrastructure and human capital.

Fitch expects the Philippines to remain one of the fastest-growing economies in the Asia-Pacific region, with growth forecasts of 6.4 percent in 2020 and 6.5 percent in 2021, faster than last year's 5.9 percent.

The agency anticipates that fiscal reforms will maintain manageable government debt and support external finances, with tax reforms projected to boost revenues.

BSP Governor Diokno expressed confidence that the positive outlook will lead to an "A" credit rating within the next two years, which he believes will lower borrowing costs and spur investments.

Fitch noted the Philippine economy's resilience to the coronavirus outbreak and downplayed the impact of government contract reviews on the overall business environment and foreign direct investment.