S&P raises PHL outlook to positive from stable

Standard & Poor’s Rating Services on Friday said it expects “further rating improvements” for the Philippine economy after it gave the country a “positive” outlook.   The global credit rating agency said it raised the outlook to “positive” from “stable” because the country’s “external vulnerability has diminished” owing to improving net debt indicators, rising international reserves, and expanding import cover.   “We expect further rating improvements to be most likely driven by improvements in fiscal and debt credit metrics," S&P credit analyst Agost Benard said.   "The ratings could be raised on material progress in achieving a sustainable structural revenue improvement or further strengthening of the public balance sheet, yielding reduced fiscal vulnerability," Benard added.   BSP Gov. Amando Tetangco Jr. welcomed the upward revision of the country’s outlook and anticipated a long-sought investment grade on its sovereign ratings and long-term debt papers.   "We remain hopeful that our desired credit rating upgrade to investment grade is forthcoming," Tetangco said.   "The recognition of our diminished external vulnerability because of our strong external liquidity position is well-placed," Tetangco added. However, the S&P also warned that a deterioration in external liquidity or “weakened commitment to fiscal consolidation” could tilt the Philippines’ debt trajectory upward.   S&P said the erosion of liquidity could make the ratings “stabilize at the current level or come under downward pressure.” — ELR/VS, GMA News