The Department of Finance said that the US-China trade war had not made it “easy” for the Philippines, but expressed confidence that the country could withstand the impact.
Finance Secretary Carlos Dominguez III said during the question-and-answer portion of the Pre-State of the Nation Address (Sona) Economic and Infrastructure Forum on Monday that the ongoing trade war was affecting everybody in the world, which led to higher risks.
In the case of the Philippines, he said the country exports a lot of products to China, which are then reexported to the United States.
“Because of this trade war, risks have been elevated. And as a result, interest rates and loans are being priced now with these additional risks,” he said.
Despite this, he expressed comfort in the fact that the Philippines was not a “big trading economy,” which meant relatively less exposure to the consequences of the trade war.
“We are not a big trading economy and our growth is going to be dictated by how we spend domestically,” he added.
Foreign trade has not been the biggest contributor to economic growth for the Philippines, unlike Singapore or Thailand that rely heavily on exports.
Citing industry players, Trade and Industry Secretary Ramon Lopez previously said global demand for electronic parts and final goods had been shrinking. The Philippines is not the lone country in the region suffering a decline, he said. Out of 11 trade-oriented Asian economies, nine countries posted declines in their export performance.
To improve the country’s exports, Lopez said the DTI was working on diversifying the country’s export products and markets as well as maximizing current trade ties, among other efforts.