China pivot makes Trump effect to Philippines limited, says NEDA
November 9, 2016 | 4:40pm
President-elect Donald Trump gives his acceptance speech during his election night rally, Wednesday, Nov. 9, 2016, in New York.
AP / John Locher
DAVAO CITY, Philippines - The Philippines could suffer from uncertainty with Republican Donald Trump as new US president, but thanks to President Rodrigo Duterte's aligning to China, the impact may be limited, officials said on Wednesday.
"We have a safety net which was foreseen by the president. He foresaw that there's this likelihood that Trump will become (US) president so he decided to pivot to China," Socioeconomic Planning Secretary Ernesto Pernia said Wednesday.
"He's a clairvoyant... We are now diversifying our friends so we don't crash when the country you depend on is in trouble," he said in a briefing after the Philippines Development Forum here.
In a surprising turn of events, Trump defeated popular favorite Democrat Hillary Clinton to take over the White House over the next four years beginning January next year.
A day before the elections, Pernia himself said Clinton would be "better" for the country's economic relations with the US since Trump tends to be "protectionist and inward-looking."
This time, he said there could indeed be lower investments coming from the US, affecting most especially business process outsourcing (BPOs) industry that employs more than a million Filipinos and three-fourths of income are coming from the US.
During his campaign, Trump said he would ban migrants and BPOs since they are taking the jobs from Americans. Pernia said this could happen, although it remains to be seen.
"An open economy is better than a closed, inward-looking economy. Maybe some in the BPOs will be going back to the US," he said.
Finance Secretary Carlos Dominguez agreed, saying a candidate and a president are "two different people."
"We are not sure what a Trump presidency will follow in terms of its policies," Dominguez said.
In the near-term however, National Treasurer Roberto Tan said financial markets could be rattled with "uncertainty," although the Philippine economy will be strong to handle it.
The Philippine Stock Exchange index closed down 2.58 percent or 188.76 points to end trading at 7,119.04 on Wednesday. The peso also hit as low as 48.85 to a dollar, before closing flat at 48.59.
"Given our fundamentals, we will be able to take on the uncertainty and given our borrowing program tilted domestically, there will be limited foreign exchange risks," Tan said.
Central bank governor Amando Tetangco Jr. said liquidity will be provided to banks if needed "to address market price action on renewed global political risk."
According to separate government data, the US accounts for around a third of annual overseas remittances with more than 3.5 million Filipinos living and working there.
It also continues to be ranked among the top five export destination and import source and accounted for nearly 70 percent of equity foreign direct investments last year.
US businesses are likewise worried, but they expressed optimism that the US economy, being more privately-driven, will survive.
"Donald Trump has no experience in public policy. All this is in business and it takes a business perspective towards foreign policy, national defense," said John Forbes, senior adviser at American Chamber of Commerce in the Philippines.
"The jobs are in private sector and it's not so easy for the public sector to stop jobs abroad," he added.
For Peter Wallace of the Wallace Business Forum, Duterte may even be able to "understand" Trump. But he rejected the idea the comparison between the two.
"Totally disagree with that. The fact that they are both outspoken they both say sometimes outrageous things doesn't make them the same kind of people whatsoever," Wallace said.
"President Duterte is a much more insightful, intelligent what not, a far better person than I think Donald Trump is," he said. — Infographic by RP Ocampo
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