Standard and Poor's Ratings Services has affirmed the "BB-" credit rating for foreign currency bonds issued by the Philippine government, citing the country's resilient external accounts and improving liquidity position.
"Short-term external liquidity risk for the Philippines is moderate, and remains on an improving trend," S&P said in a report issued Wednesday.
The Philippines is one of Asia's frequent debt issuers overseas and has tapped the global debt market twice last year to help fund the budget
deficit.
The New York-based ratings firm said the steady inflow of remittances, which rose 4.5 percent in the first 10 months of 2009 combined with growing service exports receipts, and rebound in the portfolio inflows and foreign direct investments boosted the Philippine foreign reserves. This pushed its net international reserves to rise to an all-time high of 45 billion U.S. dollars.
But S&P noted that the Philippine sovereign credit ratings could be raised if the government can narrow its widening fiscal deficit and improve
its revenue collection.
The Philippine fiscal deficit widened to 272.5 billion pesos (6 billion U.S. dollars) in the months of January to November as the global crisis
slackened revenue collection and pushed the government to increase spending through a fiscal stimulus package.
S&P expects the next administration, which will be installed in the national elections in May, will focus on fiscal consolidation.