Standard & Poor's upgraded its credit rating on the Philippines to investment grade on Thursday helping the nation gain more foreign capital flows. At the same time, the agency revised down the rating outlook on Indonesia, citing stalling reforms.

The ratings on the Philippines was lifted to 'BBB-/A-3' from 'BB+/B' with a 'stable' outlook. The country got its first-ever investment grade in March, when Fitch Ratings upgraded its rating to +'BBB-'.

"The upgrade on the Philippines reflects a strengthening external profile, moderating inflation, and the government's declining reliance on foreign currency debt," said Standard & Poor's credit analyst Agost Benard.

"We expect the country to move into a near-balanced external position because of persistent current account surpluses, in which large net transfers from Filipinos working abroad more than offset ongoing trade deficits," Benard added.

Separately, S&P revised the outlook on Indonesia's 'BB+/B' sovereign credit rating to 'stable' from 'positive'. The rating agency said that the stalling of the reform momentum and a weaker external profile have diminished the potential for an upgrade over the next 12 months.

According to S&P, the 'stable' outlook reflected its view that the weakened policy environment and external pressures are fairly balanced against the country's strong growth prospects, conservative fiscal policy, and favorable debt trajectories.

RTTNews