From a lo­cal stand­point, had Amer­ica voted wisely?


I cov­ered Pres­i­dent Ro­drigo Duterte’s re­cent state visit to China and it was dur­ing the busi­ness fo­rum at the Great Hall of the Peo­ple in Bei­jing when he jolted ev­ery­one by an­nounc­ing his “sep­a­ra­tion” from the United States. We’re all used to hear­ing about Duterte’s bad blood against the US. But many of us were un­pre­pared for what’s so far the strong­est anti-US rhetoric com­ing from the un­ortho­dox pres­i­dent.

In a way, the state visit to China be­came all about the Philip­pines’ bit­ter­sweet re­la­tions with the US as much as it was about the rekin­dling of ties with China, but the $24 bil­lion in­vest­ment and con­ces­sional fund­ing com­mit­ments se­cured by the Philip­pine team were over­shad­owed by sep­a­ra­tion anx­i­eties.

When asked whom he pre­ferred to be the new US pres­i­dent, Duterte picked no one, only say­ing that his fa­vorite hero is Rus­sian pres­i­dent Vladimir Putin. Last month, the odds seemed to fa­vor a Clin­ton pres­i­dency, and Duterte’s bud­get czar Ben Dio­kno thought she would be the “safer” choice. “I think there's too much un­cer­tainty with Trump,” he had said at the Philip­pines In­vest­ment Con­fer­ence 2016.

Many have likened Duterte to Trump, and vice versa, not just in terms of their devil-may-care lan­guage but also be­cause of their per­ceived hos­til­ity to tra­di­tional al­lies. They are also both seen to be good for busi­ness. In Duterte’s case, his vow to bring forth a “golden age of in­fra­struc­ture” in the Philip­pines is in­dis­putably cap­ti­vat­ing. Mean­while Trump, whose bat­tle cry is to “make Amer­ica great again,” plans a sig­nif­i­cant re­duc­tion in in­di­vid­ual in­come taxes and cor­po­rate taxes and the elim­i­na­tion of the es­tate tax.

It will be an in­ter­est­ing ver­bal war if Trump and Duterte were to trade in­sults, both be­ing masters in this craft, but then again, Duterte may not risk blurt­ing out ex­ple­tives against some­one who could not only match his fiery lan­guage but also has the temer­ity to get back at him in a way that could hurt the Philip­pine econ­omy.

Ac­cord­ing to Amer­i­can bank­ing gi­ant Cit­i­group, in the case of a Trump pres­i­dency, a rise in pro­tec­tion­ism would be a ma­jor threat to emerg­ing mar­kets like the Philip­pines. Trump had talked about the need for iso­la­tion­ist and pro­tec­tion­ist US poli­cies, for in­stance, threat­en­ing to im­pose steep tar­iffs on Chi­nese and Mex­i­can im­ports. Imag­ine what he could do if he gets pissed at the Philip­pines.

In Au­gust, Citi is­sued a re­search note that scored coun­tries based on over­all vul­ner­a­bil­ity to a prospec­tive rise in pro­tec­tion­ism post-US elec­tions. A score of 1 was deemed as “av­er­age,” above 1 was “good,” and be­low 1 was deemed “bad.” The over­all score was based on the ra­tio of the met­rics where each coun­try per­formed pos­i­tively to those where it per­formed neg­a­tively. Based on the Citi in­dex, the Philip­pines scored 0.6 over­all.

Philip­pine ex­ports ac­count for 19.7 per­cent of to­tal gross do­mes­tic prod­uct (GDP) while ex­ports to the US ac­counted for 2.9 per­cent of to­tal GDP—both of which are be­low av­er­age equity mul­ti­plier ( EM) ra­tios. How­ever, our ex­ports to the US ac­count for 14.7 per­cent of to­tal ex­port re­ceipts, slightly higher than the av­er­age among our peers.

On for­eign ex­change vul­ner­a­bil­ity, Citi es­ti­mated the US dol­lar­de­nom­i­nated debt of the Philip­pine cor­po­rate sec­tor at 31 per­cent of to­tal, in line with the 31.8 per­cent EM av­er­age. How­ever, the coun­try’s cur­rent ac­count sur­plus of 2.3 per­cent of GDP is lower than the 3.1 per­cent EM av­er­age. Av­er­age debt to equity of 65.9 per­cent is also higher than the 43.4 per­cent EM av­er­age.

Seen from all an­gles, it’s not to the Philip­pines’ in­ter­est to sever ties with the US, and even Duterte rec­og­nizes it. Mov­ing for­ward, es­pe­cially with a new US pres­i­dent, ev­ery­one hopes that the Philip­pine pres­i­dent will be more cir­cum­spect about dis­cussing for­eign pol­icy with­out con­sult­ing his cab­i­net first, which ex­pect­edly has to en­gage in peren­nial dam­age con­trol. Many Filipinos agree with Duterte’s bid to get more out of its long-time al­liance with the US, to gain recog­ni­tion as an equal sovereign state, but they wouldn’t want to see the coun­try turn into an in­ter­na­tional pariah in the process. Will the end jus­tify the means? Only time will tell.

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