Philippines sees higher exports to US as trade war with China worsens

MANILA, Philippines — The Philippines can boost trade with the US amid its escalating trade war with China as it looks for other sources of capital goods, the National Economic and Development Authority (NEDA) said.

During the economic briefing for banks and other finance institutions late Tuesday, Socioeconomic Planning Secretary Ernesto Pernia said with the imposition of steeper tariffs on Chinese imports, the US may turn to the Philippines for imports of key capital goods such as electronics, transport equipment and non-agricultural products.

“The trade war will have a positive net effect on the Philippines. That is because our main exports to the US comprise electronic and transport equipment as well as non-agricultural products – chemical and rubber products, ferrous metals and mineral products – as inputs to their production,” he told investment strategists.

By NEDA’s preliminary analysis, increased outbound shipments of these products to the US would contribute $34.7 million to the country’s gross domestic product (GDP) in 2018 and is expected to rise to $50.7 million by 2022 to 2023. From 2018 to 2022, this would average $42.2 million.

Pernia noted, however, that this simulation for the top Philippine exports to the US at the moment is only an indicative figure and would still have to be subjected to a more detailed analysis.

Electronics, which remain the top Philippine export commodity worldwide, are also shipped to China but NEDA, for now, has not yet conducted simulations for the Chinese market.

Pernia believes that while imports of such commodities from the Philippines would be a little more expensive, Philippine products are competitive.

“I think we’re competitive. Maybe even if we’re a bit more expensive. But because the source in China is not available, so they (US) have to get more from the Philippines,” he said.