Business

Philippines upgraded by Fitch to investment grade

Workers at a factory in Philippines
Image caption The economy of the Philippines grew by 6.6% in 2012, beating government targets

The Philippines has been given an investment grade from a credit ratings agency for the first time, a move expected to boost investment.

Fitch Ratings said it had raised the nation's long-term foreign currency debt rating to BBB- from BB+.

The Philippines has become one of the fastest growing economies in the region.

Analysts said it was a vote of confidence and would improve investors' perception of the country.

"The investment grade rating substantiates all the progress Philippines has made in terms of fiscal sustainability, reforms, and improved growth outlook," said Prakriti Sofat from Barclays Capital in Singapore.

"This will generally have a positive impact on sentiment towards the Philippines' currency and across markets."

Many analysts had been expecting a ratings upgrade for the country and said other agencies could follow suit in the coming months.

The official investment grade reduces borrowing costs and widens the pool of potential investors.

Some investment funds enforce restrictions on debt that is below investment grade, while some require two out of the three top ratings agencies to have given the country an investment grade.

The economy of the Philippines grew at a rate of 6.6% in 2012, beating government targets of 5%-6% growth.