The Philippines is among the Asian countries that can withstand the adverse impact of a protectionist policy by newly-elected US President Donald Trump, Hongkong and Shanghai Banking Corp. said in a report Wednesday.
Frederic Neumann, co-head of the bank’s Asian Economic Research, said the challenges for Asia were becoming more evident and 2017 looked like they could be the most difficult for the region since 2009.
“If the past few weeks are any indication, things are bound to get a lot tougher. Trade is one thing, with exports already struggling and little prospect for a policy-driven rebound,” Neumann said.
“But the effects are not necessarily 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,” Neumann said.
“By contrast, Malaysia, China, Korea, Taiwan and Thailand should be more affected,” he said.
Global debt watcher S&P Global Ratings said the Philippine economy had the potential to grow higher next year and continue outperforming its peers in the region despite the expected adverse effects of Trump’s policy.
S&P said it expected the Philippine economy to grow 6.7 percent in 2017, faster than its previous forecast of 6.3 percent. The growth projection is also higher than Indonesia’s 5.7 percent, Malaysia’s 4.8 percent, Singapore’s 2.9 percent and Thailand’s 4.1 percent.
S&P said in 2018, the Philippines would likely expand 6.7 percent, still outperforming Indonesia’s 5.9 percent, Malaysia’s 4.9 percent, Singapore’s 2.5 percent and Thailand’s 3.9 percent.
“The Southeast Asian economies are seeing stable growth with the Philippines outperforming the region, given its growing middle class, a business process outsourcing boom, and expansionary fiscal policy with emphasis on public infrastructure,” S&P said.
Finance Secretary Carlos Dominguez III said the Philippines could withstand the adverse effects of protectionist policy of Trump because the Philippines was beginning not to rely too much on the western economies, particularly the United States.
Trump said during the campaign period that US immigration policies might be tightened and outsourcing activities could be reduced in a bid to bring back jobs to the US.
Standard Chartered Bank also said the Philippine economic growth outlook remained rosy due to robust domestic demand, higher infrastructure investment and services sector providing the needed support for a sustained growth.
The bank said the Philippines could grow 6.8 percent this year and 6.7 percent in 2017.
GDP grew 7 percent in the first three quarters at the upper bound of the Duterte administration’s target range of 6 percent to 7 percent.
The Philippine economy grew 5.9 percent last year, making it one of the best performers in the region.