MANILA, 7 April — The Philippine stock market registered a gradual increase, racking up a gain of more than two percent especially because there was a noted improvement in the country’s international credit rating from Standard & Poor’s (S&P).

Analysts said stock trading started out sluggish but improved little by little so that the market barometer added on 29.24 points to 1,432.86 points. Market turnovers climbed with total value turnover reaching 3.39 billion pesos ($66.47 million), a climb of over 171 percent. Paper trades were 238 percent more at 2.1 billion.

The market obviously reacted positively as S&P gave the Philippine government a pat on the back for improved fiscal management and sound economic policies. The S&P rating changed from negative to stable.

Credit assessments by Moody’s Investor Service and Fitch ratings were bearish on the Philippines two years ago during the term of former President Joseph Estrada.

Both Moody’s and Fitch, however, have taken a better stance, stamping the country with a stable outlook amid the economic reforms introduced by President Gloria Macapagal-Arroyo.

A credit upgrade heightens the country’s chances of borrowing from foreign sources at lower rates.

Although the coming trading week will start with a holiday, sales of stocks are seen to further skyrocket because the country’s gross international reserves (GIR) are at an all-time high of $17.32 billion. This rise will, however, be slightly tempered by the fact that the current inflation rate rose to 3.6 percent after seven straight months of decline.

The GIR shot up last month as the Department of Finance (DoF) successfully raised $1 billion from foreign bond investors. The latest GIR level is more than $2 billion above of BSP’s year-end target. GIR is BSP’s total foreign currency holdings, predominantly in US dollars, including gold reserves and the International Monetary Fund’s special drawing rights (SDRs) currency.

Analysts said a large dollar reserve position helps stabilize local prices by insulating the country from extreme foreign exchange rate volatility, and also helps reduce price volatility.

More importantly, the latest GIR level gives the country a 5.8-month import cover — the theoretical buffer in the event of a sudden halt in foreign remittances due to capital flight.

The inflation rate rose slightly from 3.4 to 3.6 percent in March, the National Statistics Office (NSO) said.