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US-China trade war impact on PHL minimal so far —BSP

The Philippines remains largely unaffected by trade tensions between China and the United States, the Bangko Sentral ng Pilipinas (BSP) said Tuesday.

The country is still largely unaffected by recent escalation of tensions between the world’s two biggest economies, according to the BSP Department of Economic Research (DER).

“As far as we can tell, the impact of the US-China trade dispute seems to have been quite limited in the case of the Philippines,” DER Director Dennis Lapid said during the Conference on Gearing Up for External Competitiveness in Pasay City.

“Increasingly, we’re trading more with the rest of the region—other than China—and less with the US. So that provides a buffer cushion in the slowdown,” said Lapid.

US President Donald Trump was reported to have said on Monday that he was ready to impose another round of tariffs on Chinese imports, if talks with Chinese President Xi Jinping fail at the Group of 20 Summit later this month.

In 2018, BSP Governor Benjamin Diokno, who was then the Budget secretary, said the looming trade war could be beneficial to the Philippines if it leads to lower prices of steel and cement.

“At the macro level, really, it’s bad for the world economy. But if the trade war results in lower prices of steel, lower prices of cement, because there’s a war going on, that’s beneficial to us because of the Build, Build, Build,” he said last year.

Under the Duterte administration’s flagship Build, Build, Build infrastructure program, the government intends to spend over P8 trillion until 2022, largely funded tax revenue.

In the same conference, the International Monetary Fund (IMF) on Tuesday flagged the Philippines to strengthen its relations with other allies should trade tensions worsen.

“Historically, when big countries fight, small countries suffer—and even suffer more. This is the time when the Philippines needs a more stable, rules-based global environment,” IMF Resident Representative to the Philippines Yongzheng Yang said.

Among the possible steps the Philippines may take, noted Yang, is to deeper integration with regional neighbors in the Association of Southeast Asian Nations (ASEAN).

He noted that the country may strengthen international rules on trade and investment and combat protectionism, as well as accelerate domestic reforms. —VDS, GMA News