The Philippines has earned itself an upgrade to “BBB+”, marking this as the highest credit rating in the country’s history. The upgrade was given by global debt watcher, Standard and Poor’s (S&P), which cited the country’s strong growth trajectory, healthy external position and sustainable public finances as factors for the grade improvement.

The country now stands two levels above the investment grade rating. As a result, borrowing costs from the international market is likely to lower for both the government and private entities. This in turn translates to cheaper financing options for the domestic market; possibly leading to an even greater boost to the economy.

“We raised the rating to reflect the Philippines’ strong economic growth trajectory, which we expect to continue to drive constructive development outcomes and underpin broader credit metrics over the medium term”, said S&P in a statement. “The rating is also supported by solid government fiscal accounts, low public indebtedness and the economy’s sound external settings”.

S&P has also given the country a “stable” outlook. This means that they are confident that the Philippines will maintain its economic momentum in the medium term, as well as continuing to contain its fiscal deficits and maintain stable public indebtedness.

“We may raise the ratings over the next two years if the government makes significant further achievements in its fiscal reform program, or if the country’s external position improves such that its status as a net external creditor becomes more secure over the long term”, added S&P.

However, the debt watcher warns that the country may lose its current rating if the government’s fiscal policy leads to higher than expected levels of debt; or if the nation’s GDP growth declines by a significant margin.

S&P further elaborated on their reasoning for raising the Philippines’ rating; stating that the country’s economy was growing at a consistently faster rate than its peers. As long as the current investment rates are maintained, they predict that the country’s growth rate shall continue at this pace.

S&P also noted the country’s declining unemployment rate, which is a good indicator of the economy’s bolstered labour market; despite an ever increasing working-age population.