THE PHILIPPINE government is worried over US President-elect Donald J. Trump’s plan to impose tariffs on all US imports, which would impact global economic growth, National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan said.
“I believe that the Philippines can work with any government. If in any respect, if there’s going to be any negative effects is… (if the US) will push through with what the incoming president was saying concerning the imposition of tariffs… of 20% for non-China and 60% for China goods, that would have an effect on the worldwide economy. And that’s what’s going to worry us,” Mr. Balisacan said at a briefing on Thursday.
Mr. Trump, who was declared the winner of the US presidential elections, has promised to impose 60% tariffs on US imports of Chinese goods, in addition to as much as 20% tariffs for all imports.
Mr. Balisacan said the imposition of tariffs on all imports will raise prices and put pressure on inflation in the US.
“Hopefully the US is not going to surrender, since it’s not even of their interest, long-term interest, to be accurate, to isolate the economy. Because eventually it is going to backfire when it comes to inefficiencies, after which all other forms of issues within the US and that would put pressure on the inflation and the purchasing power within the population. And so I believe they may start to comprehend that,” the NEDA chief said.
The USA is the highest destination of Philippine-made goods. In September this 12 months, Philippine exports to the US were valued at $1.08 billion, accounting for 17.3% of total exports.
The US goods and services trade deficit with the Philippines stood at $10.4 billion in 2022.
“I can assure you that we’re very mindful of the thrust to diversify our economy. As I said, this is required to melt any hostile effect of a shock like a sudden increase in protectionism in trading partners,” Mr. Balisacan said.
Meanwhile, Finance Secretary Ralph G. Recto said that a Trump-led United States can be good for equities but bad for the bond market as rates have been going up.
“Nevertheless it could also be temporary, as you could have a powerful US dollar in the meanwhile. When you have a look at the map, we’re strategically situated, and if President Trump, being an actual estate person, will see the worth within the Philippines, then it is going to even be good for the Philippines,” Mr. Recto said in a hearth chat on Thursday.
“One other thing, if President Trump might be good for global security and if you could have less geopolitical tensions and fewer wars, then that is sweet for everybody,” he added.
Semiconductor and Electronics Industries within the Philippines Foundation, Inc. (SEIPI) President Danilo C. Lachica said the electronics industry is looking forward to the US pursuing efforts to assist the Philippines triple its assembly, testing, and packaging capability.
“We hope to draw latest American investments. So, I believe I’m optimistic that the industry might be supported,” he said on the sidelines of the Pilipinas Conference 2024 on Thursday.
Asked about concerns over potential protectionist measures, Mr. Lachica said: “On one hand, there might be onshoring and all that. But realistically, the US is just not an island. They’ll need foreign inputs when it comes to materials, workforce, and technology.”
“So I’m optimistic that the realistic needs will outweigh the previous pronouncements within the previous Trump administration,” he added.
Philippine Exporters Confederation, Inc. President Sergio Ortiz-Luis Jr. believes Mr. Trump will help lessen the geopolitical tenisons in Asia and Russia, which is able to help exports.
“I’m joyful that Trump won … (Mr. Trump) said that he’ll attempt to stop the war in Ukraine and in addition attempt to avoid attending to war with China,” he told reporters on the sidelines of the event.
“For exports, I don’t think it is going to change much. But when the geopolitics go down, then our exports to China might return because before, Greater China was a much larger market than everyone. So hopefully, if the stress is lessened, we are going to get better our exports to China,” he added.
He said that even when the US became more protectionist, the Philippines could still get better that trade with other markets.
“What protectionist work can he do? Our trade with the US is barely a lot. Even when that’s cut by 10% by protectionism, we are going to get better it elsewhere, especially with China,” he said.
Philippine Chamber of Commerce and Industry (PCCI) Chairman George T. Barcelon said that the Philippines may gain advantage if Mr. Trump manages to finish Russia’s war with Ukraine.
“If (Mr. Trump) is capable of do this, that’s a really positive development due to uncertainty,” said Mr. Barcelon, who noted that the war disrupted supply chains which raised prices of some commodities.
“I imagine he got here out with a press release that he’ll lift the sanctions on Russia. So having said that, I believe the costs on those commodities coming out of each Ukraine and Russia will stabilize,” he said.
“That is sweet for the world. And we within the Philippines import most of those food-related items and in addition energy, coal. In order that’s a positive development for us,” he added.
Nonetheless, he said that what is significant is for the Philippines to secure trade preferences with the US.
“We export garments to the US the identical as other countries. We’re hoping that if we will have some preference within the tariff, we will export more in order that we will create more garments, factories, and jobs,” he said. — Justine Irish D. Tabile with inputs from Aubrey Rose A. Inosante
