Fitch upgrades Philippines sovereign rating on strong economic performance

MANILA: 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.

"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.

Fitch‍ forecast real gross domestic product growth of 6.8 percent 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 programme to support continued robust growth over the medium term.

Duterte has pledged to modernise 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. - Reuters