MANILA, Philippines (AP) -- Moody's Investors Service on Thursday became the third major credit rating agency to upgrade the Philippines to investment grade, citing its robust economy, political stability and improved governance.
Moody's said it raised the rating by one notch to Baa3 from Ba1. It also assigned a positive outlook to the rating, which means there's a possibility of it being upgraded again in the future.
Standard & Poor's and Fitch Ratings raised the country's credit rating earlier this year, reducing borrowing costs for the Philippines and local companies on the international market.
It was the latest sign of confidence in President Benigno Aquino III's leadership.
Aquino has been aggressive in prosecuting corruption and promoting good governance at a time the Philippines is enjoying an economic bonanza. The economy expanded 7.5 percent in the second quarter, making it one of Asia's fastest growing.
The Asian Development Bank on Wednesday raised the Philippines' growth forecast to 7 percent for 2013 from 6 percent forecast in April.
Moody's said the Philippines' economic performance has entered a structural shift to higher growth, accompanied by low inflation.
The new growth path is being reinforced by improved fiscal management, while increased government revenue has accommodated sizeable increases in infrastructure and social spending, it said in a statement. Still, revenue collection remains weak when compared with other investment grade countries, the agency said.
It said that the country remains relatively shielded from external financial shocks.