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ON the eve of the United States presidential election, Economic Planning Secretary Ernesto Pernia said he saw continuing risks to the Philippine economy if the Republican Party presidential candidate Donald Trump won the election.
It will be a protectionist, inward-looking American economy, he said, that will impact on trade, investment, and remittances. He cited Trump’s oft-repeated statement that he would bring American companies back to US shores, so there would be more jobs for Americans.
Thus, he said, President Duterte’s pivot to China was a “safety net” in case of a Trump victory. Diversifying our partnership with Asian countries, he added, may turn out to be a “saving grace.” It will help keep the national economy from crashing “if the country you depend on is in trouble.”
Well, Trump has won the election against Democratic Party candidate Hillary Clinton. He will take his oath of office as the 45th president of the United States on January 20, 2017.
During the campaign, Trump vowed to bring back American companies who had moved much of their operations abroad to take advantage of lower labor costs, savings in production and marketing costs, and tax breaks in certain countries.
This was possibly Trump’s greatest appeal to American voters – more jobs and thus greater income for ordinary Americans.
Business process outsourcing (BPO) was a major part of this outward movement of American companies. If Trump carries out his vow, much of the BPO that has provided so much employment for Filipinos around the country may be affected, although Secretary Pernia said the US economy is private sector-driven and American firms will make their own decisions on where to put their operations and their investments.
Pernia also expressed concern over the remittances sent home by overseas Filipino workers in the US, should the Trump administration move to carry out his basically anti-immigration policy. A London think tank has said that the Philippines, followed by Taiwan and Korea, have most to lose among Asian countries in a Trump presidency.
All these concern arise from the rhetoric of Trump during the campaign. Finance Secretary Carlos Dominguez, however, said the new president and the old candidate are two different people. “We will have to wait and see what policies a Trump presidency will implement,” he said.
Our economic planners now have to plan for the coming Trump administration as it affects our economy. It will also affect other areas of PH-US relations, especially our foreign policy and our security arrangements, but we expect the greatest impact will be on our economy, for which Secretary Pernia, Secretary Dominguez, and the other economic planners of the Duterte administration must now prepare.