Credit ratings agency Moody's Investor Service on Tuesday raised the Philippines' credit outlook to "positive" from "stable", on the back of expectations that the government will continue to consolidate its debts and finances.

"Moody's considers that active debt management, coupled with the (Philippine) central bank's increasingly solid track record of inflation management, has allowed for an improvement in the Philippines' debt structure, including lower average borrowing costs and foreign currency exposure, as well as longer average maturities," Moody's said.

"The sovereign's vulnerability to global financial market shocks has been reduced by the build-up of foreign exchange reserves, resulting in turn from robust current account surpluses and healthy capital inflows in recent years," the agency stressed.

The revision in the outlook for the Philippines could result in an upgrade of the country's credit ratings.

This, however, will depend on the Philippine government's ability to improve its revenue collection and to reduce its public sector debt, Moody's said.

Philippine central bank governor Armando M. Tetangco, Jr. welcomed the decision of Moody's Investor Service, saying that the positive outlook is a sign that the agency is "seeing the fruits of good governance on all fronts."