THE PHILIPPINE government is concerned 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 think that the Philippines can work with any government. If at all, if there’s going to be any negative effects is… (if the US) will push through with what the incoming president was saying about the imposition of tariffs… of 20% for non-China and 60% for China goods, that could have an impact on the global economy. And that’s what will 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, as well as up to 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 United States.
“Hopefully the US will not give up, because it’s not even in their interest, long-term interest, to be accurate, to isolate the economy. Because eventually it will backfire in terms of inefficiencies, and then all other kinds of issues in the US and that could put pressure on the inflation and the purchasing power in the population. And so I think they will start to realize that,” the NEDA chief said.
The United States is the top destination of Philippine-made goods. In September this year, 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 are very mindful of the thrust to diversify our economy. As I said, this is needed to soften any adverse 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 would be good for equities but bad for the bond market as rates have been going up.
“But it may be temporary, as you have a strong US dollar at the moment. If you look at the map, we are strategically located, and if President Trump, being a real estate person, will see the value in the Philippines, then it will also be good for the Philippines,” Mr. Recto said in a fireside chat on Thursday.
“Another thing, if President Trump will be good for global security and if you have less geopolitical tensions and fewer wars, then that is good for everyone,” he added.
Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI) President Danilo C. Lachica said the electronics industry is looking forward to the US pursuing efforts to help the Philippines triple its assembly, testing, and packaging capacity.
“We are hoping to attract new American investments. So, I think I’m optimistic that the industry will 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 could be onshoring and all that. But realistically, the US is not an island. They will need foreign inputs in terms of materials, workforce, and technology.”
“So I am optimistic that the realistic needs will outweigh the former pronouncements in 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 will help exports.
“I am happy that Trump won … (Mr. Trump) said that he will try to stop the war in Ukraine and also try to avoid getting to war with China,” he told reporters on the sidelines of the event.
“For exports, I do not think it will change much. But if the geopolitics go down, then our exports to China might go back because before, Greater China was a much bigger market than everyone. So hopefully, if the tension is lessened, we will recover our exports to China,” he added.
He said that even if the US became more protectionist, the Philippines could still recover that trade with other markets.
“What protectionist work can he do? Our trade with the US is only so much. Even if that is cut by 10% by protectionism, we will recover it elsewhere, especially with China,” he said.
Philippine Chamber of Commerce and Industry (PCCI) Chairman George T. Barcelon said that the Philippines could benefit if Mr. Trump manages to end Russia’s war with Ukraine.
“If (Mr. Trump) is able to do that, that’s a very positive development because of uncertainty,” said Mr. Barcelon, who noted that the war disrupted supply chains which raised prices of some commodities.
“I believe he came out with a statement that he will lift the sanctions on Russia. So having said that, I think the prices on those commodities coming out of both Ukraine and Russia will stabilize,” he said.
“That is good for the world. And we in the Philippines import most of these food-related items and also energy, coal. So that’s a positive development for us,” he added.
However, he said that what is important is for the Philippines to secure trade preferences with the US.
“We export garments to the US the same as other countries. We’re hoping that if we can have some preference in the tariff, we can export more so that we can create more garments, factories, and jobs,” he said. — Justine Irish D. Tabile with inputs from Aubrey Rose A. Inosante