NEDA sees ‘net’ positive impact of trade war

THE PHILIPPINE ECONOMY could end up with a net gain in the trade war between the US and China as the world’s biggest economy seeks other sources of cheaper goods, the National Economic and Development Authority (NEDA) said late Tuesday.

Socioeconomic Planning Secretary Ernesto M. Pernia said that foreign sales of electronic products — the country’s top export — could particularly benefit from the current situation, among a few other goods.

Latest available state data show that foreign sales of electronic products grew 5.4% yearon-year to $21.613 billion as of July even as overall merchandise export sales dipped 2.8% to $38.744 billion in the same comparative seven months.

“Actually, we did an initial simulation analysis of the impact and it’s actually going to result in a net positive effect for the Philippines. That is because our main exports to the US consist of electronic equipment and transport equipment as well as other nonagricultural products, chemical and rubber products and ferrous metals, and mineral products as inputs to their production,” Mr. Pernia told reporters on the sidelines of the Philippine Economic Briefing at the Bangko Sentral ng Pilipinas complex late Tuesday.

“Our estimate is the net effect on our GDP (gross domestic product) is something like $34.7 million in 2018,” he added, adding that this increment can be expected to rise to $42.2 million annually until 2022 or 2023.

He said the amount reflects only potential increased US demand for Philippine products.

“They import from us, but because of the (trade war) they can’t import anymore from China. They will import more from us,” said Mr. Pernia.

“Because of the war between China...the US now needs another source of electronic products, which we produce, including transport equipment so at least it’s not going to be a negative issue,” he explained. “I think we’re competitive. Maybe even if we’re a bit more expensive, but because the source in China is not available so they (US) have to get more from the Philippines.”

Sought for comment, however, Nicholas Antonio T. Mapa, a senior economist at ING in the Philippines, said the country may not automatically benefit from the trade war.

“The export sector is heavily dependent on the electronics sector. Although it’s too early to gauge whether our electronic products — which are usually components for bigger and more sophisticated electronic devices — will benefit or not from the ongoing trade spat between the two largest economies. Unless the US brings in semiconductors and components for smartphones for assembly we may have to find a conduit partner — like Taiwan or South Korea — who would then sell finished products such as tablets and smartphones (with PHL components) to the US,” he said in an e-mail on Wednesday.

FULL STORY

Read the full story by scanning the QR code with your smartphone or by typing the link <http://bit.ly/2xmw0Wr>