Duterte: Fight against crime and corruption paying off

Philippine President Rodrigo Duterte poses for a picture with female soldiers during his visit at Bangolo town in Marawi city, southern Philippines October 17, 2017. (Reuters)
Updated 11 December 2017
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Duterte: Fight against crime and corruption paying off

MANILA: Fitch Ratings on Monday upgraded the Philippines’ sovereign credit rating, citing the nation’s strong economic performance and policies and pointing to no immediate impact on investment from President Rodrigo Duterte’s deadly war on drugs.

Fitch, the first credit rating agency to raise the Philippines’ credit rating to investment grade in 2013, said investor confidence remains strong, as indicated by solid domestic demand and inflows of foreign direct investment.
“As such, there is no evidence so far that incidents of violence associated with the administration’s campaign against the illegal drug trade have undermined investor confidence,” it said in a statement.
Its upgrade to BBB from BBB- aligns the agency’s ratings on the Southeast Asian country with those of peers Standard & Poor’s and Moody’s Investor Services.
Although the Southeast Asian nation is among the fastest growing economies in Asia, some analysts had flagged risks Duterte’s war on drugs could pose to investment.
The Philippines has drawn international criticism for the killing of about 3,900 people in police anti-drugs operations since Duterte took power in June last year. But the police deny allegations by human rights advocates that many of the killings were executions.
A statement from Duterte’s office on Monday said the upgrade was an affirmation of the administration’s fight against crime and corruption.
Fitch‍ forecast real gross domestic product growth of 6.8 percent for the Philippines in 2018 and 2019 and said it would maintain its place among the fastest-growing economies in the Asia-Pacific​ region.
Fitch said it expects higher infrastructure spending under the government’s public investment program to support continued robust growth over the medium term.
Duterte has pledged to modernize the country’s airports, roads, railways and ports through a six-year $180-billion, “Build, Build, Build” initiative to attract much-needed foreign direct investment and lift economic growth.
Finance Secretary Carlos Dominguez said he expects more positive rating actions for the Philippines over the next two years.
“Our macroeconomic fundamentals are on par with, if not better than, those of higher-rated sovereigns and continue to improve,” he said in a statement.
Investors’ reaction was muted, with the peso slightly firmer against the US dollar following Fitch’s announcement. It opened at 50.42 and rose further to 50.31 from Friday’s close of 50.50.
The Philippines’ benchmark stock index was down 0.2 percent at 0312 GMT.
Fitch upgraded the Philippines by one notch to ‘BBB-’ in 2013, with the agency citing Manila’s efforts to achieve fiscal sustainability, curb corruption and increase infrastructure spending.
The move to investment grade was followed by S&P’s less than two months later, lifting the Philippines’ ratings to BBB- from BB+. Moody's followed suit, upgrading the Philippines by one notch to Baa3 from Ba1.
Moody’s and S&P have since raised their respective ratings to Baa2 and BBB.


Scientific study finds asylum seekers boosting European economies

Updated 30 min 3 sec ago
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Scientific study finds asylum seekers boosting European economies

  • Asylum seekers contributed most to a country’s gross domestic product after three to seven years, the research found
  • The findings come amid a rise of anti-immigrant sentiment across Europe, where immigration peaked in 2015 with the arrival of more than a million refugees and migrants from the Middle East and Africa

NEW YORK: Asylum seekers moving to Europe have raised their adopted nations’ economic output, lowered unemployment and not placed a burden on public finances, scientists said on Wednesday.
An analysis of economic and migration data for the last three decades found asylum seekers added to gross domestic products and boosted net tax revenues by as much as 1 percent, said a study published in Science Advances by French economists.
The findings come amid a rise of anti-immigrant sentiment across Europe, where immigration peaked in 2015 with the arrival of more than a million refugees and migrants from the Middle East and Africa.
An annual report by the United Nations High Commissioner for Refugees released on Tuesday showed the global number of refugees grew by a record 2.9 million in 2017 to 25.4 million.
The research from 1985 to 2015 looked at asylum seekers — migrants who demonstrate a fear of persecution in their homeland in order to be resettled in a new country.
“The cliché that international migration is associated with economic ‘burden’ can be dispelled,” wrote the scientists from the French National Center for Scientific Research, the University of Clermont-Auvergne and Paris-Nanterre University.
The research analyzed data from Austria, Belgium, Denmark, Finland, France, Germany, Iceland, Ireland, Norway, the Netherlands, Portugal, Spain, Sweden and the United Kingdom.
Asylum seekers contributed most to a country’s gross domestic product after three to seven years, the research found. They marginally lowered unemployment rates and had a near-zero impact of public finances, it said.
Greece, where the bulk of migrants fleeing civil war in Syria have entered Europe, was not included because fiscal data before 1990 was unavailable, it said.
Chad Sparber, an associate professor of economics at the US-based Colgate University, said the study was a reminder there is no convincing economic case against humanitarian migration.
But he warned against dismissing the views of residents who might personally feel a negative consequence of immigration.
“There are people who do lose or suffer,” he told the Thomson Reuters Foundation.
“Immigration on balance is good,” he said. “But I still recognize that it’s not true for every person.”