THE PHILIPPINE government is concerned about newly-elected US President Donald J. Trump’s plan to impose measures tariffs on all US imports, which would have an impact on the global economy growth, National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan said.
“I think the Philippines can work with any government. If there is a negative e at allFfects is… (if the US) will follow through with what the incoming president said about imposing tariFfs… of 20% for non-Chinese goods and 60% for Chinese goods, which could have an impact on the global economy. And that is what will worry us,” Mr. Balisacan said during a briefingFon Thursday.
Mr Trump, who has been declared the winner of the US presidential election, has promised to impose a 60% tariffFfs on US imports of Chinese goods, as well as up to 20% tariFfs for all imports.
Mr. Balisacan said imposing 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 is not even in their interest, in the long run, to be precise, to isolate the economy. Because it will ultimately backfire in terms of inefficencies, and then all kinds of other problems in the US, and that could put pressure on the inflowFand the purchasing power of the population. And so I think they’re going to realize that,” the NEDA chief said.
The United States is the top destination for Philippine-made goods. In September this year, Philippine exports to the US were valued at US$1.08 billion, accounting for 17.3% of total exports.
The US trade deficit in goods and services with the Philippines reached $10.4 billion in 2022.
“I can assure you that we are very aware of the urge to diversify our economy. As I said, this is necessary to mitigate the negative impact of a shock such as a sudden increase in protectionism among trading partners,” Mr. Balisacan said.
Meanwhile, Treasury Secretary Ralph G. Recto said a Trump-led United States would be good for stocks but bad for the bond market as interest rates rise.
“But it could be temporary as you have a strong US dollar right now. If you look at the map, we are strategically located, and if President Trump, as a real estate person, will see the value in the Philippines, then it will be good for the Philippines,” Mr. Recto said during a fireside chat. on Thursday.
“One other thing: If President Trump will be good for global security and if there will be less geopolitical tensions and less wars, then that’s good for everyone,” he added.
Danilo C. Lachica, Chairman of the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI), said the electronics industry looks forward to U.S. efforts to help the Philippines triple its assembly, testing and packaging capacity.
“We hope to attract new American investments. So I think I am optimistic that the industry will be supported,” he said on the sidelines of the Pilipinas Conference 2024 on Thursday.
Asked about concerns about possible protectionist measures, Mr Lachica said: “On the one hand, there could be onshoring and all that. But realistically, the US is not an island. They will need foreign input in materials, labor and technology.”
“So I am optimistic that the realistic needs will outweigh the previous statements in the previous Trump administration,” he added.
President Sergio Ortiz-Luis Jr. of the Philippine Exporters Confederation, Inc. believes Trump will help reduce geopolitical tensions in Asia and Russia, which will benefit exports.
“I’m happy that Trump won… (Mr. Trump) said he will try to stop the war in Ukraine and also try to prevent war from happening with China,” he told reporters on the sidelines of the event.
“I don’t think much will change for exports. But if geopolitics worsens, our exports to China could return, because previously Greater China was a much bigger market than everyone else. So hopefully when the tension subsides, we will restore our exports to China,” he added.
He said even if the US became more protectionist, the Philippines could still restore that trade with other markets.
‘What protectionist work can he do? Our trade with the US is only limited. “Even if that is reduced by 10% through protectionism, we will get it back elsewhere, especially in China,” he said.
Philippine Chamber of Commerce and Industry (PCCI) Chairman George T. Barcelon said the Philippines could benefit if Mr. Trump succeeds in ending Russia’s war with Ukraine.
“If (Mr. Trump) is able to do that, it is a very positive development because of the uncertainty,” said Mr. Barcelon, noting that the war disrupted supply chains, causing the prices of some commodities to rise.
“I believe he came out with a statement that he will lift sanctions on Russia. That said, I think the prices of raw materials from both Ukraine and Russia will stabilize,” he said.
“That’s good for the world. And we in the Philippines import most of these food-related items, and also energy, coal. So that is a positive development for us,” he added.
However, he said it is important for the Philippines to secure trade preferences with the US.
“We export clothing to the US in the same way as other countries. “We hope that if we can get some preference in tariffs, we can export more, so we can create more clothes, factories and jobs,” he said. — Justine Irish D. Table with input from Aubrey Rose A. Inosante