MANILA: The Philippines on Thursday completed its transformation from one of Asia's weaker economies after Moody's became the third and final ratings agency to grant the country investment-grade status.

The decision to give Manila a Baa3 rating with a “positive outlook” follows similar moves by Standard & Poor's and Fitch earlier this year.

Moody's made its decision citing the country's strong growth, political stability and improved governance.

“The Philippines' economic performance has entered a structural shift to higher growth, accompanied by low inflation,” it said.

Economic growth in 2012 and the first half of 2013 were among the highest in Asia-Pacific even as inflation remained “well-anchored” and below the central bank's ceilings, it added.

“The new growth path is being reinforced in part by improved fiscal management,” allowing more money to be spent on infrastructure and social services.

A “Baa3” rating is the lowest in the outfit's investment ranks but represents an important milestone for the country, which was once considered one of Asia's laggards.

The Philippines economy expanded 6.8 per cent in 2012 and 7.6 per cent in the first half of 2013, among the highest levels in the Asia-Pacific.

President Benigno Aquino's spokesman Ramon Carandang told AFP the upgrade was “proof that the continuing fiscal reforms...are further improving our credibility in the international community.”

“Our fundamental macroeconomic strengths...serve to differentiate us from other emerging markets that are resource- and export-dependent,” Finance Secretary Cesar Purisima said.

He said in a statement that despite the three upgrades, “we are still among the most underrated countries”.

The Philippine stock market closed 0.4 per cent higher Thursday following the Moody's upgrade.