Top government economic officials are optimistic that the Philippine economic growth momentum is strong enough to overcome the impact of trade tensions between the United States (US) and China.
“There are those things that basically would re-channel some of what would have been export activities to filling up the domestic demand. It’s a good thing that in a way, we are insulated with the very strong domestic economy,” Trade Secretary Ramon Lopez said during the recent Pre-State of the Nation Address (SONA) Economic and Infrastructure forum held at the Philippine International Convention Center.
“Some exporters have opted to supply the strong domestic demand.”
Lopez pointed out some exporters have opted to supply the strong domestic demand rather than export their products.
The trade chief also underscored the need to “catch and absorb” investments that will be transferring hopefully from China and other affected countries.
Aside from traditional export markets, the trade head said the country is in talks with other countries in which the Philippines does not usually export to, such as Russia and the Middle East.
“Diversifying our products, making them more competitive, higher value-added and at the same maximizing also our GSP (Generalized System of Preferences) privileges to the US and also GSP privileges to the EU (European Union). Looking at other markets,” he added.
Finance Secretary Carlos Dominguez III said the US-China trade war is affecting every country in the world, including the Philippines.
“Although we are not a big trading nation, we are not immune to negative events that happen abroad. One big effect is that because there is uncertainty in trade policy abroad, the banks take that into consideration and raise interest rates so that’s certainly risk,” Dominguez said.
“We are facing high waves but we have a good ship.”
“We are facing high waves but we have a good ship, we have a good captain, we have good navigators and we have very good and supportive legislature and I am sure we will counter this ahead of the rest,” the finance chief added.
Austin Ong, research director at Integrated Development Studies Institute (IDSI), said the Philippines is in the better position to reap the opportunities being offered by the trade tensions between the US and China.
“With our human resource, with our English capability, we are actually positioned if we are more entrepreneurial, more innovative, and more connected. So the infrastructure, the ‘Build, Build, Build’, is very important,” Ong said.
But he said the country needs to upgrade its education and human resource skills.
“Our best engineers are abroad. The first option for them is to go abroad. But with the Build, Build, Build, PPP (public private partnership), prospects for the next several years are positive; actually the Philippines is the place to be,” Ong added.
The IDSI looks at productive and construction frameworks and viewpoints on global developments, including the US-China trade war.