"The stable outlook assigned by S&P to the Philippines’ ratings reflects the company’s confidence on this government’s ability to carry out much needed reforms, particularly in the fiscal sector," the DOF chief said. S&P also affirmed its shortterm ratings with a stable outlook for both domestic and foreign currency debt at ‘A-3’ and ‘B’, respectively.

The recent S&P review maintained its long-term foreign currency rating at BB, which Amatong insists is still "an affirmation of confidence in the long-term growth prospects of the Philippine economy (as well as) the ability to honor external obligations."

On the other hand S&P lowered its long-term local currency rating to ‘BBB-’ from ‘BBB’, and affirmed the ‘B’ short-term foreign currency and the shortterm local currency rating of ‘A-3’. The outlook on the long-term ratings is stable.

The affirmation of the long-term foreign currency rating takes into account the country’s satisfactory external liquidity position, which is underpinned by the stable inflow of overseas remittances.

"The Philippines’ short-term liquidity risk is moderate and compares favorably with its peers," said S&P credit analyst Agost Benard, associate director in the Sovereign & International Public Finance Ratings Group. The country’s reserves provide short-term debt coverage of about 270 percent, and the ratio of gross financing requirement (current account, short-term debt, and amortization) to reserves is projected at 54 percent this year.