PHL to withstand looming trade war, says Moody's

The impact of a full-blown trade war between China and the US may impact on the growth of certain members of the Association of the Southeast Asian Nations (ASEAN), but the Philippines may be able to withstand such external headwinds, Moody's Investors Service said Thursday.

Trade protection is just the way things are, said Moody’s Investor Service vice president and senior credit officer Christian de Guzman.

“We are looking at the trade protection as not necessarily a threat, but really more of a reality given what happened in the US and China in the past few weeks,” De Guzman  told reporters during a roundtable in Makati City.

The world’s biggest economies—US and China—have fueled fears of a global trade war by issuing statements that they would impose restrictive taxes on each other’s products.

White House economic adviser Larry Kudlow said US President Donald Trump’s plan did not indicate a softening stance on China, according to a report by Reuters.

Such concerns would impact other ASEAN countries such as Malaysia, Thailand, and Singapore whose economies are deeply rooted in exports.

“Those that are going to be resilient to some of these external headwinds will be places like the Philippines and Indonesia,” he said.

“ASEAN, after all, has very export-dependent nations. The Philippines isn’t one of those export committed nations,” De Guzman noted.

The Philippine Statistics Authority has reported that the country’s balance of trade expanded by nearly 133 percent to a $3.615 billion last April, from $1.554 billion a year earlier.

Exports contracted by 8.5 percent to $5.11 billion from $5.59 billion in the same comparable period, the fourth straight month of declines. —VDS, GMA News