:00:00. > :00:22.The Philippines is set to inaugurate a new president, but will Rodrigo
:00:23. > :00:26.Duterte's tough talking ways help the economy?
:00:27. > :00:28.And the economy as well looms large as Australians head to the polls for
:00:29. > :00:41.a general election. Good morning, Asia and hello, world.
:00:42. > :00:46.Glad you could join us for this Thursday edition of Asia Business
:00:47. > :00:50.Report, I'm Rico Hizon. A big day in the Philippines, President-elect
:00:51. > :00:54.Rodrigo Duterte will be inaugurated in just a few hours. He swept to
:00:55. > :00:59.power promising to wipe out crime and corruption and drugs within his
:01:00. > :01:05.first six months in office. Already the threats seem to have had an
:01:06. > :01:08.effect on the crime front, hundreds of drug pushers and addicts have
:01:09. > :01:13.surrendered to the police but what will he do about the economy?
:01:14. > :01:17.Earlier I spoke with Roger from Manila via webcam, he's a leader
:01:18. > :01:20.economist for the Philippines at the World Bank.
:01:21. > :01:24.If you look at the ten point plan, the first point very good is they
:01:25. > :01:30.want to keep the macro economic policies in place, maintain and
:01:31. > :01:34.strengthen them. That's very welcome news. If you look at the ten point a
:01:35. > :01:40.gender as a whole, it's really focused on the challenge that the
:01:41. > :01:47.Philippines faces, jobs, and that focus is also welcome -- agenda.
:01:48. > :01:51.During the Aquino administration despite the growth rate you had the
:01:52. > :01:55.widening gap between the rich and poor and the poverty incidence rate
:01:56. > :01:58.is still very high, Roger. How does the Duterte government plan to
:01:59. > :02:02.address this? I think first of all in the most
:02:03. > :02:09.recent years we do see the trend getting better. We see the income
:02:10. > :02:14.growth of the bottom 20%... We see it being stronger actually than
:02:15. > :02:18.income growth of the top 10%. There are some good trends, but these need
:02:19. > :02:22.to be maintained and sustained over a longer period for people to really
:02:23. > :02:27.feel it. That's what the Duterte administration wants to do.
:02:28. > :02:32.He also wants to implement more inclusive growth in the economy. How
:02:33. > :02:38.does he plan to do this? Is this building up on more small and medium
:02:39. > :02:41.enterprises and agriculture and manufacturing sectors?
:02:42. > :02:44.First they will focus on the sector where the poor are where they have
:02:45. > :02:50.to make a living, that is in rural areas and agriculture. Then they
:02:51. > :02:53.will look at making it easier to do business, which is really quite
:02:54. > :02:57.complicated at the moment, especially for small businesses.
:02:58. > :03:01.They will look at land tenure, the first thing you need is to be secure
:03:02. > :03:05.around the property you have, a farmer or a small businessmen, so
:03:06. > :03:11.those basics will be addressed. We think the ten point plan makes a
:03:12. > :03:16.very coherent action plan. Roger from the World Bank joining us
:03:17. > :03:20.earlier from Manila. Australians bowed in a federal election this
:03:21. > :03:24.weekend, while climate change, immigration and education are key
:03:25. > :03:29.issues it's the economy that is likely to decide who wins -- right.
:03:30. > :03:34.Australia has avoided recession for 25 years but the future is unclear
:03:35. > :03:38.as a resources boom fuelled by the Chinese appetite for iron ore and
:03:39. > :03:45.coal continues to fade. Phil Mercer has the details from Sydney.
:03:46. > :03:49.This is where surfboards are born. Even President Obama has a board
:03:50. > :03:54.made by Barry Bennett, who has been in the industry for 60 years. His
:03:55. > :03:59.family firm in Sydney sells to China, but it's at the mercy of
:04:00. > :04:02.economic forces such as the exchange rate and Australia's high labour
:04:03. > :04:06.costs that the government can do little to control. On the world
:04:07. > :04:12.market if we want to export we still have to compete with countries that
:04:13. > :04:18.have got a lot lower wage structure that what we have. What we've got is
:04:19. > :04:22.what we've got. It won't change no matter who gets into Parliament.
:04:23. > :04:27.Australia is a country in transition and voters hope the next Prime
:04:28. > :04:31.Minister will chart a responsible path to prosperity as the Long
:04:32. > :04:36.mining boom here comes to an end. The gap it is hoped will be filled
:04:37. > :04:41.by manufacturing and tourism as well as agriculture and construction. For
:04:42. > :04:47.decades immigrants have been part of Australia's economic success. This
:04:48. > :04:51.man, a refugee from Iran, has a degree in mathematical science. But
:04:52. > :04:57.now he runs a company fitting showers and kitchens.
:04:58. > :05:04.Right now business is booming. Especially in the building industry
:05:05. > :05:07.in Sydney. The government has started to realise that mining is
:05:08. > :05:15.not there for ever and they needed to start to look at a new way to
:05:16. > :05:22.create work and to create wealth for our country. The more migrants we
:05:23. > :05:29.get to come to Australia, the stronger our economy's becoming.
:05:30. > :05:35.But Britain's decision to leave the European Union has created anxiety
:05:36. > :05:40.here. And Australia's political leaders have put economic security
:05:41. > :05:43.at the heart of their campaigns. Businesses have, though, proved to
:05:44. > :05:47.be resilient in the face of global shocks before and many believe they
:05:48. > :05:50.can once again ride out any financial storm that comes their
:05:51. > :05:56.way. Phil Mercer, BBC News, Sydney. In
:05:57. > :06:00.other business news making headlines, South Korea's industrial
:06:01. > :06:05.output has bounced back after two months of year-on-year declines. The
:06:06. > :06:11.bank of Korea puts growth in output at 4.3% for May. The growth
:06:12. > :06:15.outperformed expectations as car and semiconductor production boosted
:06:16. > :06:19.activity. As for retail sales, it also expanded at 5.1% over the same
:06:20. > :06:23.month. The Federal Reserve says nearly all
:06:24. > :06:28.of the largest US banks are stable enough to increase pay-outs to
:06:29. > :06:31.shareholders with just two affiliates of foreign banks failing
:06:32. > :06:37.its annual stress test. Deutsche Bank filed for the second year and
:06:38. > :06:42.Santander air USA has failed for a third.
:06:43. > :06:46.France's President Francois Hollande has given a bullish assessment of
:06:47. > :06:50.the economy in the country despite the impact of the UK decision to
:06:51. > :06:55.leave the EU. He told a French website he expected the French
:06:56. > :06:59.economy to add at least 200,000 new jobs over the next year. He
:07:00. > :07:04.predicted a recession for the UK and conceded it would create additional
:07:05. > :07:08.risks for France. Meanwhile, Brexit continues to
:07:09. > :07:12.dominate discussions among the business community for the
:07:13. > :07:17.Association of south-east Asian Nations, ASEAN, the outcome will be
:07:18. > :07:22.important because Europe is ASEAN's second largest trading partner after
:07:23. > :07:26.China according to the EU ASEAN business council. I spoke to the
:07:27. > :07:29.executive director of the council Kris Humphries, who is calling for a
:07:30. > :07:33.smooth transition. I think people are looking at the
:07:34. > :07:38.situation in Europe and the UK at the moment with a bit of amazement.
:07:39. > :07:44.The key thing to remember is UK is a long-term trading partner of ASEAN,
:07:45. > :07:47.we are the largest source of FDI for ASEAN by a long-distance. The
:07:48. > :07:52.fundamentals aren't going to change overnight because of Brexit. The
:07:53. > :07:55.position my members are taking is, while you're waiting for the
:07:56. > :07:59.politicians to sort themselves out in Europe and come up with a
:08:00. > :08:03.coherent plan, life has to go on and we need to maintain stability and
:08:04. > :08:08.business has to continue. There needs to be a smooth transition but
:08:09. > :08:11.going forward ASEAN governments and businesses are thinking twice,
:08:12. > :08:17.there's a lot of apprehension, what they are going to do next about the
:08:18. > :08:21.investments in the UK and in Europe, because also there's a fear that
:08:22. > :08:26.after the UK other countries could follow suit? We are speculating at
:08:27. > :08:29.that point because we don't know what the plan will be with the UK,
:08:30. > :08:32.when Will Article 50 get triggered and how long will it take after that
:08:33. > :08:38.crazy Ulloa there are many unknowns. There are some emerging evidence
:08:39. > :08:43.already that company is about to invest in the UK are stepping back,
:08:44. > :08:46.they want to assess the situation and look elsewhere.
:08:47. > :08:52.The businesses you have been speaking with, which industries are
:08:53. > :08:55.looking at stepping back? Those industries that were looking to
:08:56. > :09:00.invest with a view to selling from the UK into Europe are going to have
:09:01. > :09:04.to reassess and they could look at moving investments elsewhere. One
:09:05. > :09:08.thing sitting here at ASEAN you can see this as an opportunity, if
:09:09. > :09:12.you're looking to attract investment then investors looking at Europe may
:09:13. > :09:17.want to look elsewhere to make those investments. Development boards at
:09:18. > :09:22.ASEAN and investment boards could look at that as an opportunity.
:09:23. > :09:27.There could be more cooperation between the ASEAN governments and
:09:28. > :09:31.the EU to be able to come up with a coherent policy after Brexit? I
:09:32. > :09:34.think there needs to be, one thing for sure is the European Commission
:09:35. > :09:39.has said this week life carries on as normal. The UK is still in the
:09:40. > :09:43.EU, trading will continue as normal, and they will carry on with the
:09:44. > :09:46.Philippines and Indonesia and Malaysia and they will finalise the
:09:47. > :09:52.missing bits elsewhere in the region. Chris Humphrey from the
:09:53. > :09:56.ASEAN business council. A quick look at the markets and Asian equities
:09:57. > :10:02.are rising currently for a second trading day. The Nikkei two to five
:10:03. > :10:08.up by 1.1% and the All Ords gaining 1.4%. This is because worries
:10:09. > :10:11.continue to ease over Britain's vote to leave the EU but analysts are
:10:12. > :10:16.saying this market volatility can come back any time and it is too
:10:17. > :10:21.early to say if investor appetite for risks have made a full comeback.
:10:22. > :10:25.As for Wall Street, gains for banks and energy stocks with the Dow and
:10:26. > :10:30.NASDAQ in positive territory as well. Thank you so much for
:10:31. > :10:31.investing your time with us. I'm Rico Hizon in Singapore, bye for
:10:32. > :10:32.now.