S&P affirmed its foreign currency rating of 'BB/B' and a local currency rating of 'BB+/B', two notches below investment grade, the agency said.
The announcement came a day after Fitch upgraded Indonesia's credit rating to investment grade.
"We revised the outlook to positive to reflect our assessment that the Philippines' external vulnerability has diminished," Standard & Poor's credit analyst Agost Benard said in a statement.
"The ratings could be raised on material progress in achieving a sustainable structural revenue improvement or further strengthening of the public balance sheet," he said, adding the ratings could also stabilise or come under downward pressure if fiscal consolidation efforts slip or if the country's external liquidity position deteriorates.
A revision in ratings outlook is almost always followed by a ratings upgrade.
In June, Fitch Ratings had raised Philippines' credit rating to one notch below investment grade citing improving fiscal position and budget management.