President Rodrigo Duterte’s down-to-earth candor makes him “just fit and perfect” to deal with US President-elect Donald Trump, in negotiating better deals in the light of perceived risks the possible protectionism policies espoused by the American leader could bring to the Philippine economy.
Albay Rep. Joey Sarte Salceda, a noted economist, articulated this perception, saying the Philippines is the second most vulnerable country in Southeast Asia, next to Singapore, to a possible US’s policy shift towards protectionism as declared by Trump, who won the recent US elections chanting the “Americans first” slogan.
The Albay lawmaker agreed with popular opinion the two leaders were closely similar in temperament, “brute frankness included, which should bring them to a common ground in resolving issues.” Both were political outsiders before winning their respective presidential quests, fired up by nationalistic zeal.
Duterte, known for his hostile rhetorics against US President Barrack Obama, was among the first heads of nation to greet Trump following news of his victory. “I would like to congratulate President Trump. Long live Mr. Trump! We both curse at the slightest of reasons. We are alike,” he declared in Kuala Lumpur while on his Malaysian visit when the US poll results were announced.
“We are both making curses. Even with trivial matters we curse. I was supposed to stop [cursing the US] because Trump is there. I don’t want to quarrel with anyone because Trump has won,” Duterte said, as quoted by one newspaper report.
Salceda said the biggest threats US protectionism could bring would primarily be on economic aspects, consisting of impacts on robust BPO business with the US at 5.7 percent of Philippine gross domestic product, mainly trade; 2.84 percent remittance from US/GDP, mainly in terms of economic slowdown and deportation; and 4.5 percent export/GDP, representing trade/economic slowdown.
These combine to 13 percent of the Philippine economy exposed to the US which makes it the second highest, next to Singapore, Salceda said.
Salceda, the senior vice chair of both the House committees on economic affairs and local government, said protectionist policies were also bound to slow down US’s own economic growth, and flow of trade, services, migration and remittances which are certain to impact on the Philippine economy.
Moreover, he said exports to the US were “mostly electronics which have low gross value added of 20 percent compared to BPOs and [constructively] remittances; and secondly, the social costs of deportation of some 360,000 TNTs or undocumented Filipino migrants of the 3.4 million Filipinos in the US, 88 percent of them are legal and Trump is not against legal migrants.”
The economist lawmaker, however, said there’s hope the “perceived kindred spirit of Duterte and Trump should prove useful in negotiating for Philippine economic interest, tax exemption on outsourcing and no pressure on BPO principals; and an easier pathway to citizenship for 360,000 undocumented Filipinos in the US, or a more gradual process, say over four years.”
He said contrary to widespread perception, the Philippine GDP was only 4.5 percent (export/ GDP) exposed to the US market. It was the second least exposed among its Asean neighbors, next to Indonesia, which wasd the least exposed at 2.5 percent.
Salceda said the Philippines had only a $1.5-billion trade surplus over the US, aided by GSP preferences, and since exports to the US were mostly electronics with low GVA of 20 percent compared to BPOs and remittances.
Salceda said US BPOs account for 5.7 percent Philippine GDP. US accounts for 77 percent of the $22 billion BPO sector that generated 1.1 million jobs in 2015.
He said Trump wanted to bring jobs back to the US as attempted before by President Barrack Obama through tax on outsourcing or simply through persuasive influence over BPO companies or the industries they catered to.