ASEAN KEY DESTINATIONS
Philippines credit rating rises
"We have upgraded the Philippines based on its steadily improving external liquidity profile and the underlying strengths of its external accounts, which increasingly mitigate the vulnerabilities posed by still high public and external debt, and provide buffer against adverse shifts in terms of trade or investor sentiment," Agost Benard, S&P credit analyst, said.
The upgrade also mirrored the progress achieved in debt reduction and the underlying fiscal consolidation, which brought public debt ratios in line with many of its "BB" rated peers, Benard said.
The positive developments that transpired in the last nine months include the smooth political transition following the national elections in May, strong and steady external position-with a comfortable level of external reserves and a current account surplus-the better-than-expected economic growth in the first half, and prudent spending.
The economy, as measured by the country's gross domestic product (GDP), expanded by 7.9 percent in the first six months of the year.
An indicator of economic performance, GDP measures the amount of final goods and services produced in the country.
So far this year, both the balance of payments (BOP) position and the gross international reserves (GIR) have grown past the full-year projections set by monetary authorities.
However, the narrow revenue base and high incidence of tax evasion have been the principal contributing factors to weak public finances, which resulted in still-high public debt, and severely depressed public investment for an extended period, S&P said.
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