The Philippines won its first investment-grade credit rating on Wednesday in a move President Benigno Aquino hailed as proof his country was no longer Asia's economic backwater.
Fitch Ratings cited political and economic reforms by Aquino's nearly three-year-old administration as some of the main reasons for the upgrade, as well as the resilience of the Philippine economy in recent years.
"This is an institutional affirmation of our good governance agenda. Sound fiscal management and integrity-based leadership has led to a resurgent economy," Aquino said shortly after Fitch's announcement.
"Truly, what was once known as the perennial laggard of Asia is taking off and is accelerating towards its goal of an equitably progressive society."
Fitch said that it had raised the country's key long-term foreign currency issuer default ratings to 'BBB-', or investment grade, from 'BB+', the first of the three major credit ratings agencies to do so.
The other two major agencies, Moody's and Standard and Poor's, raised the Philippines to one notch below investment grade last year.
To back its move, Fitch said the Philippines had experienced stronger and more stable growth than other BBB- countries over the past five years, and was expected to continue performing strongly with growth of 5.5 percent in 2013.
"The Philippine economy has been resilient, expanding 6.6 percent in 2012 amid a weak global economic backdrop," the agency said in a statement posted on its website that announced the upgrade.
"Governance reform has been a centrepiece of the Aquino administration's policy efforts. Entrenching these reforms by 2016 is a policy priority of the government."
Fitch cited the importance for government revenues of a "sin tax" on alcohol and tobacco products that took effect this year despite heavy lobbying by affected political and business groups.
Fitch also credited the central bank for keeping inflation under control and for managing the country's debt.
The Philippines posted an inflation rate of 3.2 percent last year.
Aquino said the upgrade would mean the government pays lower interest rates on debt and sees more foreign investment, setting off a cycle that benefits all sectors of society.
"Greater access to low-cost funds gives us more fiscal space to sustain and further improve on social protection, defence, and economic stimulus, among others," he said.
The Asian Development Bank backed Aquino's upbeat appraisal of the upgrade.
"This rating is unprecedented in the Philippines and can trigger the kind of investment that will help carry the country into its next phase of development," said the ADB's country economist for the Philippines, Norio Usui.
The Philippines has in recent decades endured much weaker economic growth than other Asia countries, due to corruption, tax evasion, security problems and a chaotic political system that has seen a dictator and many coups.
One quarter of the Philippines' population still live on a dollar a day or less.