Fitch Ratings on Tuesday affirmed Philippines' sovereign credit ratings, citing the country's strong external finances, macroeconomic stability, favorable economic prospects and falling public debt ratios.

The rating agency maintained the Philippines' long-term foreign currency Issuer Default Ratings (IDR) at 'BB+', and the local currency ratings at 'BBB-'. The outlook for both the ratings is 'Stable'. The agency also affirmed the Country Ceiling at 'BBB-', and the short-term foreign currency IDR at 'B'.

Fitch, meanwhile, warned that structural weaknesses, including low average income, a weak business environment and a low fiscal revenue take, weigh on the country's credit profile.

The agency said it expects the Philippines' GDP growth to accelerate to 5.5 percent in 2012 from 3.9 percent last year. The average annual inflation is forecast to ease to 3.5 percent this year from 4.7 percent in 2011.

According to Fitch, Philippines' lower inflation and a moderate fiscal deficit suggest scope for policy flexibility to respond to adverse economic shocks, should they materialize.

RTTNews