CLARK, Pampanga—Finance Secretary Carlos Dominguez III said Friday a possible trade war between economic heavyweights China and the United States will not have a significant impact on the Philippines, but it could dampen the economy.
“We are growing our market locally so we are very robust. We don’t rely on exports or imports as much as other economies. So we are sort of insulated, but still I am not downplaying. If there is a full-blown trade war, everybody is going to be affected,” Dominguez said at the sidelines of the Philippine Economic Briefing held at Clark Freeport Zone in Pampanga.
“We can’t say if there will be a minimal impact because we really do not know what is going to happen… And you know quite frankly, there is no winner in a trade war. So if our two markets get hurt, China and the US, we will also get hurt… I’m really concerned,” Dominguez said.
He said although the Philippines had been investing domestically to weather the potential impact of the escalating US-China trade war, it might not be enough.
He said focusing on Southeast Asia, considered one of the global growth drivers in the future, would be good in the long run.
“… But still nobody benefits I’m telling you. Nobody will win, all of us will be losers,” he said.
Earlier, the US imposed tariffs on imports of steel and aluminum from China. China retaliated by imposing tariffs on US goods, including pork, wine, fruit and nuts.
Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr. said in the same briefing the threats of increased protectionism in advanced economies would always be considered by local monetary authorities in maintaining or tweaking the policy stance.
But he expressed optimism the country would remain resilient going forward, citing the solid and strong macroeconomic fundamentals.
“There are broadening growth drivers and investors remain bullish to invest in the Philippines,” Espenilla said.
He cited the improving external payments position, sound and stable domestic banking system, and higher potential growth of the economy.
Espenilla also said inflation was expected to remain manageable and settle within the target range of 2 percent to 4 percent this year.
The economy grew 6.7 percent in 2017 and is expected to expand stronger this year by 7 percent to 8 percent, driven by higher fiscal spending, robust domestic demand and investments.