In June, the rating agency raised Philadelphia's bond rating to A-minus, the first time in more than 30 years that the city had been rated in the A category by all three major rating agencies. In 1990, the city's bonds were considered speculative investments.
The latest jump comes as Standard & Poor's has been applying new standards and methods for rating municipal bond issuers.
The agency predicted that about 30 percent of its ratings would increase and 10 percent would drop as a result of the changes. The rest of the ratings will remain the same, unaffected by the new standards, the agency said.
Ratings were raised for a number of other Pennsylvania locations Monday - Castle Shannon Borough in Western Pennsylvania also received a two-notch increase.
In a report last week, Standard & Poor's also predicted that "local government credit quality should continue to strengthen in 2014 as housing market gains gradually become reflected in their finances."
City Treasurer Nancy Winkler said the administration had "worked hard to stabilize the city's finances" and withstand financial challenges.
She said work remained to better fund the municipal pension system and increase its fund balance.