Philippines Rating Upgraded

Fitch Ratings on Monday upgraded Philippines’ credit rating to ‘BBB’ from ‘BBB-’, citing the nation’s “strong and consistent” macroeconomic performance and sound policies supporting high and sustainable growth rates.

Fitch, the first credit rating agency to raise the Philippines’ credit rating to investment grade in 2013, said investor sentiment also remained strong, as indicated by solid domestic demand and inflows of foreign direct investment, Reuters reported.

“As such, there is no evidence so far that incidents of violence associated with the administration’s campaign against the illegal drug trade have undermined investor confidence,” it said in a statement.

Although the Southeast Asian nation is among the fastest growing economies in Asia, some analysts had flagged risks President Rodrigo Duterte’s deadly war on drugs could pose to investment.

The Philippines has drawn international criticism for the killing of about 3,900 people in police anti-drugs operations since Duterte took power in June last year. But the police deny allegations by human rights advocates that many of the killings were executions.

Fitchž forecast real gross domestic product growth of 6.8% for the Philippines in 2018 and 2019 and said it would maintain its place among the fastest-growing economies in the Asia-Pacific? region.

Fitch said it expects higher infrastructure spending under the government’s public investment program to support continued robust growth over the medium term.

Duterte has pledged to modernize the country’s airports, roads, railways and ports through a six-year $180 billion, “Build, Build, Build” initiative to attract much-needed foreign direct investment and lift economic growth.

Fitch upgraded the Philippines by one notch to ‘BBB-’ in 2013, with the agency citing Manila’s efforts to achieve fiscal sustainability, curb corruption and increase infrastructure spending.

The move was followed by Standard & Poor’s less than two months later. Moody’s Investors Service in 2013 was the last of the three major agencies to lift the Philippines to investment grade status.