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Economy

Philippines gets vote of confidence from Fitch

Credit ratings agency says economy is insulated from Duterte's bloody drug war

Philippine President Rodrigo Duterte speaks at a National Heroes Day commemoration in Taguig, Metro Manila.   © Reuters

MANILA -- Fitch Ratings on Monday raised its assessment of the Philippines' sovereign debt, saying the economy is strong, and insulated from President Rodrigo Duterte's drug war.

The credit ratings agency upgraded the country's long-term credit rating to "BBB" from "BBB-," maintaining its "stable" outlook.

Fitch said the Philippines' macroeconomic performance has been consistently strong, underpinned by sound policies. Investor sentiment has also remained positive, as seen in the country's solid domestic demand and inflows of foreign direct investment, it added.

"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," Fitch said, referring to the brutal drug crackdown in which around 4,000 suspected drug peddlers and users have been killed.

The Philippine economy grew 6.9% in the third-quarter, beating expectations.

"Over the medium term, we expect higher infrastructure spending under the government's public investment program to support continued robust growth," Fitch said.

Fitch predicts Philippine real gross domestic product will expand by 6.8% in 2018 and 2019, which would keep it among the fastest growing economies in the Asia-Pacific region.

A joint congressional committee, meanwhile, is poised to pass Duterte's first tax reform bill this week, which is expected to generate additional revenue for Duterte's massive infrastructure spending. 

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