DAVAO CITY—President Rodrigo Duterte’s pivot to China was a preparation for the presidency of Republican billionaire Donald Trump, whose protectionist policies are expected to hurt remittances from overseas Filipinos and outsourcing operations of many American companies, a senior economic official said Wednesday.
“We have a safety net which was foreseen by the President. He foresaw, he’s a clairvoyant. He decided to pivot to China,” Economic Planning Secretary Ernesto Pernia said in a press briefing at the 10th Philippines Development Summit.
“Instead of depending on the US, to a great extent, we are now diversifying our friends. So you don’t crash when the country you depend on is in trouble,” he said.
On Tuesday, Pernia said that if Trump made it as the next US president, downside risks for the Philippine economy might persist.
“Well, it will be a protectionist [government], inward looking American economy. And that will impact on trade, investment and remittances,” Pernia said.
Malacañang, meanwhile, said that President Duterte is looking forward to working with Trump, who won against Democrat Hillary Clinton in a stunning upset.
“President Duterte wishes President-elect Trump success in the next four years as chief cxecutive and commander-in chief of the US military, and looks forward to working with the incoming administration for enhanced Philippines-US relations anchored on mutual respect, mutual benefit and shared commitment to democratic ideals and the rule of law,” the Office of Communications Secretary said in a statement.
Duterte commended the American democratic tradition, which they practiced through the presidential election.
“The United States presidential elections is a testament to the enduring traditions of its democratic system and the American way of life. The two-party system gives American voters freedom of choice based on party platforms, not just on personalities.”
In the same briefing, Finance Secretary Carlos Dominguez said it was too early to judge the long-term effect of a Trump presidency on the Philippines.
“Candidates and Presidents are two different people. We will see what policies a Trump presidency will implement,” Dominguez said.
“I think the stock market people are a little worried. Personally I’m not sure what effect it will be,” he said.
Trump’s win shook many financial markets rattled and casting the long-standing global political order, which hinges on Washington’s leadership, into doubt.
Share prices fell to a 10-month low while the peso slumped to a fresh seven-year low against the dollar.
The Philippines has a thriving business process outsourcing sector, which last year brought in revenues equivalent to around 10 percent of the economy.
Remittances from migrant Filipino workers in the US are equivalent to around 3 percent of the country’s gross domestic product.
The Information Technology and Business Process Association of the Philippines said that in 2015, the BPO industry generated 1.2 million direct jobs and $22 billion in revenues.
“There might be fewer investments coming from the US,” Pernia said. “Maybe some BPOs will be going back to the US.”
But Pernia also noted that the US economy is largely private sector-driven, and the chances that Trump could tell private companies where to go was unlikely.
“That is the decision of the businesses, not the government unless there’s a way of penalizing them for investing abroad,” Pernia added.
Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr, said that while uncertainties may persist, they will continue to monitor developments and provide liquidity to the market.
“Regional currencies including the peso fell on renewed risk aversion surrounding [the] market surprise in early results showing a Trump victory,” he said.
Australian-New Zealand Chamber of Commerce and Industries (ANZCham) honorary chairman Peter Wallace told reporters on the sidelines of the forum that Philippines is “in serious trouble” after Trump’s victory.
“I am worried truthfully, for the BPO sector, the call center sector, if he makes true on his promises that he is going to stop the immigration of jobs overseas we are in serious trouble. This is not a good man to have as [US] president … This is scary,” he said.
Senate Minority Leader Ralph Recto on Wednesday suggested that Duterte “reboot the ties” between the Philippines and the United States following Trump’s victory.
Recto said Duterte should first send Trump a nice congratulatory letter and declare a moratorium on cursing.
“He should stop dropping F-bombs on the White House occupant. Those intercontinental expletives he fires do no good,” Recto said.
He said Duterte should also tap Vice President Leni Robredo as the Republic’s representative to his inaugural.
“If the No.1 can’t make it, then it should be the No. 2. Anyone with a lower rank will convey the message that we are stuck in the Chinese orbit and have downgraded our Washington DC presence,” said Recto.
He said Trump’s victory could open a new chapter in relations with the United States, which the Philippines should shape to its own advantage.
“Whether Duterte will have a ‘bromance’ with Trump is up to both of them, for as long as the defined national interest is served, and comes ahead of conjoining personal interests. Trump’s victory will only open an uncharted territory in Philippine-US relations if we do not plan ahead,” Recto added.
Senator Win Gatchalian expressed hope for the continuation of stable Philippine-American trade relations despite the changing of the guard in the United States.
He also said Duterte might have met his stylistic match in President-elect Trump, who has drawn comparisons to Duterte due to his strong personality and frank speaking style.
“I think that the first Duterte-Trump meeting will be one of the most anticipated meetings between two heads of state in a long time. Who knows, maybe they’ll even become friends,” said Gatchalian.
Senator Grace Poe jestingly told reporters she did not vote in the US election when sought for comment on Trump’s victory.
During the Philippine presidential campaign, Poe had been accused of being a US citizen.