Philippine treasurer Roberto Tan said the nation\'s bonds, Asia\'s second-best performers in the past year, will probably advance this year as the country wins an investment-grade rating and the government borrows less. \"There\'s still room for improvement in bond yields if we get a rating upgrade,\" Tan said in an interview yesterday in Manila. The ratio of debt to gross domestic product, at about 50 per cent, is \"very modest\" and the inflation outlook is \"benign,\" he said. Malaysia\'s ratio is 58 per cent, while the US\' is 69 per cent, data compiled by Bloomberg show. Fitch Ratings gives the Philippines a foreign-currency debt rating of BB+, its highest junk level, and urged revenue increases and more growth for an upgrade. Peso securities returned 16 per cent over the past year, second only to the 35 per cent in Indonesia among 10 local- currency debt indexes compiled by HSBC Holdings. \"The market seems to say we deserve an investment grade,\" said Theresa Marcial-Javier, senior vice-president in Manila at BPI Asset Management. The government aims to cut its deficit-to-GDP ratio to 2 per cent by next year from a target of 2.6 per cent this year, Tan said. Gross borrowing this year will be lower than 700 billion pesos (Dh59.85 billion) from an estimated 738 billion pesos last year, he said.