Philippines seen to weather Trump headwinds

MANILA, Philippines -  The country’s trade and investment landscape can withstand the possibility of muted investments coming from American companies due to uncertainties over the policies of US President Donald Trump, Trade Secretary Ramon Lopez said.

“On investors and BPOs (business process outsourcing companies), I believe the investment attractiveness of the Philippines will continue to be here due to the quality of human resources and costs that we have,” Lopez told The STAR.

“And for manufacturers, the access to our huge market of 109 million Filipinos and to the 600-million ASEAN (Association of Southeast Asian Nations) market (will continue to keep the investment attractiveness of the Philippines),” he said.

Both the Philippine Economic Zone Authority (PEZA) and the American Chamber of Commerce of the Philippines (AmCham) have reported cases of American companies which have expressed interest to expand but decided to hold off investments for now as they wait for clearer policies from Trump.

According to AmCham senior advisor John Forbes, the Philippines would see a slowdown in investments from American companies over the short term as Trump’s policies are unveiled.

PEZA director general Charito Plaza has also said that a number of American locators, especially BPOs, have decided to hold off expansion in the country.

US Ambassador to the Philippines Sung Kim, however, downplayed reports that American companies investment in the business process outsourcing (BPO) industry in the Philippines would slowdown.

“I’m not terribly concerned that somehow we will see downtrend in the US engagement in the BPO industry here anytime soon,” Kim said during the Makati Business Club’s General Membership Meeting.

He said the Philippines has successful BPO operations and remains an attractive location for American BPO companies.

He said the country also has competitive wages.

In addition, there is very strong cultural affinity that drives US businesses to set up BPO operations in the Philippines instead of other countries.

“Regardless of what policies may come out in Washington, all of those big advantages or positive attractive factors that draw companies to the Philippines will not change,” Kim said.

For its part, the IT and Business Process Association of the Philippines (IBPAP) said that “amidst the positive outlook, the IT-BPM industry shares the concern of the national and local governments, industry regulators, legislators, the financial sector, and all other stakeholders regarding the future development of trade policies between the Philippines and the United States.”

“To-date, there has been no definitive word about how international trade policies will develop. During this time, the IT-BPM industry will continue to work with the national and local governments, industry regulators, legislators, the financial sector, and all other stakeholders to mitigate the possible shift in trade relations, and protect the Philippines’ leadership in the global outsourcing industry,” the IBPAP said.

Expected to pick up the slack in US investments, however, are investments coming from China and Japan.

In terms of trade, Lopez said the Philippines would continue to take advantage of its Generalized System of Preferences (GSP) privilege with the US and also its GSP Plus status with the European Union.