HSBC Asia economics research head Frederic Neumann said the impact of the uncertainty brought about by the policies to be implemented by the Trump administration is not uniform across Asia. “Indonesia, the Philippines and India are likely to be more shielded from the Trump effect given their low debt and low export exposures. By contrast, Malaysia, China, Korea, Taiwan and Thailand should be more affected,” he said.
AP/Seth Wenig, file
Philippines faces less risk from Trump
Lawrence Agcaoili (The Philippine Star) - December 1, 2016 - 12:00am

MANILA, Philippines – British banking giant HSBC said the Philippines is one of the few countries in Asia Pacific likely to be less affected by the shocking victory of Republican Donald Trump in the US.

HSBC Asia economics research head Frederic Neumann said the impact of the uncertainty brought about by the policies to be implemented by the Trump administration is not uniform across Asia. “Indonesia, the Philippines and India are likely to be more shielded from the Trump effect given their low debt and low export exposures. By contrast, Malaysia, China, Korea, Taiwan and Thailand should be more affected,” he said.

Neumann said the Bank of Japan is emerging as a winner with a weaker yen.

“In sum, 2017 looks like it’ll be the most difficult for the region since 2009. It’s not, of course, entirely the president-elect’s fault – his administration, after all, hasn’t even outlined a detailed policy agenda yet, let alone taken the reins of power. Plus, Asia’s travails are partly self-inflicted,” Neumann said.

Neumann said, the Trump administration could adopt a more protectionist stance as he vowed to shelve the Trans-Pacific Partnership (TPP) agreement.

Likewise, HSBC sees the US Federal Reserves hiking rates three times next year.

“This amounts to a stiff headwind for Asian economies that have come to rely on rapid credit growth to sustain demand in recent years,” he said.

The economist also cited the continued weakening of the regional currencies against the dollar due to the impending interest rate increase.

“Currency moves are compounding the effect. While exchange rate depreciation should, in principle, provide a boost to Asian exports, the resulting tightening in financial conditions (higher rates) could more than offset the loosening of monetary conditions (weaker exchange rates,” he said.

Debt watchers Fitch Ratings and Moody’s Investors Service earlier said the policy pronouncements of US president-elect Donald Trump raises global uncertainties affecting trading partners including the Philippines.

Fitch said the shocking victory of Trump would have global ramnifications.

“The US is the world’s largest economy and its pre-eminent diplomatic and military power. Uncertainty over future US policy automatically creates uncertainty for many Fitch-rated sovereigns, to varying degrees,” it said.

ASIA PACIFIC REPUBLICAN DONALD TRUMP TRANS-PACIFIC PARTNERSHIP
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