By Beatriz Marie D. Cruz, Reporter
A POTENTIAL Donald J. Trump presidency poses risks to global growth, as increased protectionism could weaken global trade, Philippine Finance Secretary Ralph G. Recto said on Wednesday.
“We’re concerned that there will likely be a setback on multilateralism, particularly in trade as well,” he told a news briefing of the Intergovernmental Group of Twenty 4 (G-24) Board of Governors in Washington, D.C. late on Tuesday Manila time, his office said in a press release.
“We all know that the motive force of worldwide growth is more trade. So, that could be a concern.”
Republican nominee Mr. Trump, who’s looking for a second presidency, has pushed stronger trade restrictions, including slapping 60% or higher tariffs on all Chinese goods and a ten% universal tariff, Reuters reported.
In its latest World Economic Outlook, the International Monetary Fund (IMF) projects global growth to stay “stable yet underwhelming” at 3.2% this yr and next yr.
“Within the Philippines, we count on our relationship with the USA to do possibly more outshoring to the Philippines, and hopefully that will likely be done also with other members of the G-24,” Mr. Recto said.
The US was the highest destination of Philippine products in August, with a complete export value of $1.22 billion (P70.7 billion).
The Philippine government can be hinging on its defense and security partnerships with the US to minimize the impacts of Mr. Trump’s protectionist policies. “We’ve a Mutual Defense Treaty. We hope to leverage that relationship in order that we don’t get affected much,” Mr. Recto told the briefing.
Under the 73-year-old defense pact, Washington and Manila are sure to defend each other in case of an armed attack on its forces, public vessels or aircraft.
Mr. Recto said many US firms have an interest to take a position within the Philippines, which bodes well for the 2 countries’ decades-long relationship.
The Philippines and US in April inked several military and trade deals with Japan, including the creation of a Luzon Economic Corridor.
“Manila is hoping that Washington under Trump will proceed its ironclad commitments with the strong bilateral relationship,” Chester B. Cabalza, founding president of Manila-based International Development and Security Cooperation, said in a Facebook Messenger chat.
The US’ continued support in the shape of defense and investments would help bolster the Philippines’ capability to defend itself, he added.
Hansley A. Juliano, a political science professor on the Ateneo de Manila University, said a possible Trump presidency is a “reverse back to the 2016 wind-down of American engagement in Asia.”
“That is unlucky, considering the numerous developments towards constructing a wider alliance to guard Philippine interests throughout the West Philippine Sea and Asia-Pacific, region,” he said in a Viber message, referring to areas of the South China throughout the country’s exclusive economic zone.
If Mr. Trump wins, the Philippines should strengthen its relationships with other partners like South Korea, Japan and Australia, and reassess Southeast Asian countries’ stand on South China Sea tensions, Mr. Juliano said.
G-24 Secretariat Director Iyabo Masha noted that the World Trade Organization (WTO) should level trade negotiations amid growing protectionism in lots of countries.
“What we’re calling on is for the WTO to develop into the middle of trade discussions, trade negotiations, and for the World Bank and the IMF to rise as much as a far more multilaterally engaged organization that may give you the option to at the very least influence the sort of policies that countries take by some means,” she told the briefing.
The group also called on the IMF and World Bank to extend support and quicken reforms especially for developing countries amid geopolitical tensions that might fan rising commodity prices and keep rates of interest elevated.
“One thing is evident — any slowdown in the worldwide economy because of these latest economic realities is sure to hit developing countries the toughest,” said Mr. Recto, who also serves because the chairman of the G-24 Board of Governors.
“Thus, we proceed to call for a more agile and strong-willed IMF and World Bank,” he said. “We’d like heightened development cooperation, scaleup support and progressive solutions as we now begin the headwinds to foster peace, stability and prosperity for all.”
To raised support member countries, the board called on the IMF to create a brand new mechanism to support countries with sound fundamentals during liquidity crises, Mr. Recto said.
The World Bank should establish “more ambitious” goals for its concessional and nonconcessional financing. The group also sought changes to the sovereign debt resolution framework to deliver debt relief to vulnerable economies.
Mr. Recto also called on the Washington-based multilateral lender to cut back its borrowing costs to higher support developing economies.
