Philippines balances sound fundamentals against risks, Moody’s says

An interagency panel headed by Philippine President Rodrigo Duterte this week approved four major infrastructure projects worth $7.59 billion. (Reuters)
Updated 15 September 2017
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Philippines balances sound fundamentals against risks, Moody’s says

DUBAI: Moody’s Investors Service on Friday said that the Philippines’ credit profile balances sound economic and fiscal fundamentals against structural challenges to competitiveness and rising political risks.
The ratings agency, in a recently-released annual credit analysis, expects the Southeast Asian nation to sustain its robust economic growth over the next few years, boosted by the government’s focus on infrastructure development, buoyant private sector investment and the recovery in external demand.
“We project real GDP growth to be broadly stable in the remainder of 2017 and to average 6.5 percent for the year as a whole, which is at the lower end of the government’s forecast range of 6.5 percent and 7.5 percent,” Moody’s said.
An interagency panel headed by Philippine President Rodrigo Duterte this week approved four major infrastructure projects worth $7.59 billion, including bridges, roads and the country’s first subway.
The current administration plans to spend $175.7 billion over the next five years for its ambitious Build, Build, Build program on what it calls the Golden Age of Infrastructure. Moody’s however believes the government will pare back its infrastructure spending plan pending passage of the Philippine tax reform legislation.
“We have also retained our projection for 2018 at 6.8 percent, below the government’s target of 7 percent and 8 percent given continued uncertainties regarding the proposed comprehensive tax reform program, which is currently being considered by the upper house of Congress,” Moody’s said.
“Strong GDP growth could accelerate even further, especially if the government achieves higher investment spending.”
Moody’s however cautioned that the worsening Islamist insurgency in Mindanao, which could lead to an expansion of martial law, may undermine both foreign and domestic business confidence and disrupt economic activity in other parts of the country.


German industry groups warn US on tariffs before Trump-Juncker meeting

Updated 22 July 2018
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German industry groups warn US on tariffs before Trump-Juncker meeting

  • Washington imposed tariffs on steel and aluminum imports from the EU, Canada and Mexico on June 1
  • Trump is threatening to extend them to EU cars and car parts

BERLIN: German industry groups warned on Sunday, before European Commission President Jean-Claude Juncker meets US President Donald Trump this week, that tariffs the United States has imposed or is threatening to introduce risk harming America itself.
Citing national security grounds, Washington imposed tariffs on steel and aluminum imports from the EU, Canada and Mexico on June 1 and Trump is threatening to extend them to EU cars and car parts. Juncker will discuss trade with Trump at a meeting on Wednesday.
“The tariffs under the guise of national security should be abolished,” Dieter Kempf, head of Germany’s BDI industry association said. Juncker should tell Trump that the United States would harm itself with tariffs on cars and car parts, he told Welt am Sonntag newspaper.
The German auto industry employed more than 118,000 people in the United States and 60 percent of what they produced was exported. “Europe should not let itself be blackmailed and should put in a confident appearance in the United States,” he added.
German Economy Minister Peter Altmaier told Deutschlandfunk radio on Sunday he hoped it was still possible to find a solution that was attractive to both sides. “For us, that means we stand by open markets and low tariffs,” he said
He said the possibility of US tariffs on EU cars was very serious and stressed that reductions in international tariffs in the last 40 years and the opening of markets had resulted in major benefits for citizens.
EU officials have tried to lower expectations about what Juncker can achieve, and played down suggestions that he will arrive in Washington with a novel plan to restore good relations.
Altmaier said it was difficult to estimate the impact of any US car tariffs on the German economy, but added: “Tariffs on aluminum and steel had a volume of just over six billion euros. In this case we would be talking about almost ten times that.”
He said he hoped job losses could be avoided but noted that trade between Europe and the United States made up around one third of total global trade.
“You can imagine that if we go down with a cold in the German-American or European-American relationship, many others around us will get pneumonia so it’s highly risky and that’s why we need to end this conflict as quickly as possible.”
Eric Schweitzer, president of the DIHK Chambers of Commerce, told Welt am Sonntag the German economy had for decades counted on open markets and a reliable global trading system but added: “Every day German companies feel the transatlantic rift getting wider.”