The Philippines could benefit from US President Donald Trump’s move to raise tariffs on imports, an economist from Standard Chartered said.
In a recent briefing in Makati City, Standard Chartered economist and foreign exchange analyst for Asia Jonathan Koh said that compared to other countries in the region, the Philippines is “a lot more insulated” from the impact of higher tariffs.
He said the Philippines could also benefit from foreign direct investment (FDI) inflows, as companies look for other areas to invest in.
“The Philippines only [has] a USD4 billion trade surplus with the US. So within the region if you were to pick a country that is a potential target, probably a lot of people will pick Vietnam because the trade surplus with the US increased massively,” Koh said.
Koh said some companies from Taiwan and Korea are looking at the Philippines as an alternative investment destination.
“So you also benefit a bit from the FDI inflows as well just because it is probably safer here. You will not get hit by tariffs,” he said.
Recent reforms will help attract foreign investments in the country, Koh said.
“I think over the last few years, the governmentt has done quite a bit of relaxation in the Foreign Investment Act where you allow foreign investors to allow up to 100 percent of certain sectors except key critical sectors,” he said.
Signed into law last March 2022, the Republic Act (RA) 11647 amends RA 7042 or the Foreign Investments Act of 1991.
The law allows qualified non-Philippine nationals to do business in the country or invest in a domestic enterprise up to 100 percent of its capital and liberalizes the practice of professions not governed by existing special laws.
It also allows foreign investors to set up 100 percent ownership of all small- and medium-sized enterprises.
Koh said the country’s English-speaking population and demographic dividend would also help attract investments.
“I think for the Philippines itself, one thing the Philippines has is a very strong demographic dividend. Look at the average age of population, 25 years old, so that continues to play to the strength of the Philippines,” he said.
“Secondly, majority of the population is English speaking so that is also going to be another attractive factor for the Philippines in terms of attracting investments.” (PNA)
