30/06/2017 Asia Business Report

Now on BBC News all the latest business news live from Singapore.

20 years since Hong Kong's hand over to China - is its economy better or

worse off? And it has been two decades since the Asian financial

crisis - we look at the Philippines and why it did better than its

regional neighbours in riding out the turmoil.

Thank you for joining me for this Friday edition of Asia Business

As we told you on Newsday this weekend marks 20 years since Hong

Kong saw the end of British colonial will. Chris Patten was the last

governor of Hong Kong, which is one of the major financial hubs of Asia.

My colleague asked him if he is concerned about the future of the

economy under China's growing influence. My biggest worry about

Hong Kong wasn't that the tanks would roll in from the north but

that Hong Kong would simply become the richest city in China. I don't

think that is going to happen so long as Hong Kong can hold onto the

rule of law, independent judiciary and all of those things. They are

crucial for business. Even some Chinese businesses feel they have to

go to Hong Kong to sign contracts with one another because that way

they can be properly just -- justiciable. It is the rule of all

which makes Hong Kong special and will mean it has advantages over

Shanghai or other Chinese cities. Now to India, less than a year after

the high-value currency notes were removed from circulation, another

ambitious reform initiative - the goods and services tax, GST. The

country's 1.5 billion people live in 29 separate states and each of those

states has its own tax arrangements. As of tomorrow, the GST replaces the

complex web of taxes. What does this mean for India? Our India business

team makes it down. -- breaks it down.

The goods and services tax, the GST, will unify India into a single

market. Businesses will pay one tax rather than several state and

federal taxes that they pay at the moment. There are four basic rates,

five, 12, 18 and 20 8%. Most goods and services were signed a tax rate.

There are some exceptions like milk and vegetables. -- 28%.

India's finance minister says GST could lift growth as much as 2% by

streamlining tax collections, so the government can make more money.

Businesses are worried that they are not ready for the tax overhaul.

It has been a good six months for Asian share prices despite concerns

over rising interest rates in the US. Stock markets across the region

have rallied. Looking at the Regent's biggest markets - Hong Kong

and South Korea are some of the top performers up nearly 20% since the

beginning of the year. Japan is up 6% and stocks in China have inched

higher by nearly 3%. I asked an independent strategist, Andrew

Solomon, why the difference in performance between Hong Kong and

China. This year is strange for China with the party conference at

the end of the year. People are very much expecting the markets will

trudge along ahead of that. They don't expect upside because the

government doesn't want bubbles in any sector. Equally, we don't expect

to see downside because the government will want to support the

market and maintain confidence. It is range bound. The concern is that

the yuan will weaken another policy of the government post the party

conference will be towards tightening, people are concerned

about the property market. In Hong Kong, we have seen more growth.

Largely it has come from tech names, like has done so well, and banks

continue to do well -- like Ten Cent, which is done well. Because

there is no dollar risk, it has helped Hong Kong as well.

The latest buzzword in the mobile technology is 5G and smart phone

makers have teamed up with telcos to show what the technology could bring

in a couple of years' time. Mobile phones have come a long way since

Motorola produced the first model in 1973. Check out this picture, Martin

Cooper, the inventor, with the first device. In 2020 they are on target

to be a $50 billion industry. We asked Jake Saunders about the race

to be first with 5G phones. 5G won't start properly until 2020. In 2018

just next year, in Korea they have the Winter Olympics. Samsung and LG

will do a number of 5G demos. Samsung says it will have a 5G

handset and it will have a 5G coverage running. In 2019 in the US

AT and Verizon are keen to get 5G up and running just four mobile

services. What is intriguing is it has the opportunity to provide

coverage in rural communities and perhaps small towns and villages.

In our final report this week, 20 years on from the Asian financial

crisis we look at the Philippines which at the time was seen as the

sick man of Asia but the economy did not suffer as much as its neighbours

in the region. I went to my hometown of Manila to hear from one survivor

of the crisis and find out why the Philippines is now one of the

fastest-growing economies in the region.

Manila, the capital city of one of the most dynamic economies in South

East Asia. When the Asian financial crisis devastated the region, the

Philippines managed to pull through better than its neighbours. So, how

did it happen? One of the crucial factors was its remittance economy -

everyday hundreds if not thousands of people queue up here to try to

get the permits to work overseas. The money they send back helps to

drive consumption and keep the economy buoyant. 20 years ago

remittance is made up 6%- 8% of GDP - that nearly doubled in 2005. Today

it is still worth 10% of the national income. What other factors

helped the Philippines ride out the crisis and recover quicker than

everyone else? We were late in the game in the property sector, so we

didn't have a property bubble just yet at the time. Compared with

Thailand and Indonesia, you know, they had a property bubble that was

financed by dollar debts. But at the same time... It was a tough time for

many. In 1997 Wellington song watched his business empire all but

collapsed. He is building technology company was wiped out and he spent

years painstakingly rehabilitating the luxury car dealership he began

from scratch. It came as a total surprise. We didn't know where it

came from, we had no idea how it was going to affect us. And then we just

realised that it was a financial holocaust - it was a corporate

nightmare. Every day being so fearful of what new problems will

arise. And it was like eating broken glass for breakfast every day for 11

years. So, what do you think, guys, will I be warm in London? The

Philippines is looking forward, not back. This woman is typical of the

new generation. In her early 20s, she is the average age of the

population and like many Filipinos she sees a future are broad and she

is preparing to move to London. -- abroad. Here in the Philippines are

don't get paid as much as I work for the job. -- I don't get paid. I work

48 hours and I don't get much. The expanding Philippine economy has its

challenges - a slowdown in remittances, the need to improve

infrastructure and tackling the poverty gap. Still, Anna is excited

and optimistic about the future and so too is the Philippines.

And don't forget to tune into the special programme playing out this

weekend, starting on Saturday. And before we go, a BBC exclusive, the

Philippines central bank governor takes over this weekend. In his

first interview with foreign media as head of the BSB, Nesto Junior

tells us of his priorities on Monday on Asia Business Report. And on the

market put screens, Asian markets are in negative territory, the

Nikkei is down 216 points and the All Ordinaries losing around 9%.

Thank you so much for investing your time with us, have a productive

Friday! I'm Rico Hizon, goodbye