The ongoing trade war between the US and China is seen to benefit the Philippine manufacturing sector, according to a statistician from the Asian Development Bank (ADB).
ADB’s Joseph Mariasingham said the Philippine manufacturing sector will gain more as a result of the trade conflict because of the huge electronics component sector of the country.
“Philippine manufacturing could see a boost of 0.2-0.7%, primarily in electronics. The assumption is that [the] PH economy is able to attract more trade from tariff-affected economies,” ADB’s Joseph explained, adding that electronics is one of the manufacturing subsectors that are highly integrated into the global value chain.
However, the ADB expert urged policymakers in the Philippines to focus on investing more on research and development, as well as on developing the technical capacity of Filipinos to encourage them to engage in higher value-added tasks.
Mariasingham explained that countries not affected by the imposition of tariffs could absorb imports and exports both from China and the US.
He highlighted that the US imported nearly US$600 billion worth of goods and services from China, while the latter imported about $130 billion worth of goods, making China more affected between the two countries.
He added that for developing Asian countries, Malaysia, Vietnam, and Thailand stand to benefit the most.
“They have the infrastructure to absorb the excess demand that would arise as a result of the imposition of tariffs by the US on Chinese products, mainly on electronic goods,” Mariasingham said.
Small impact on world’s GDP
Globally, these trade conflicts “would have a small impact on the world’s gross domestic product,” but the disputes could present substantial risks once they escalate. On the other hand, the regional impacts could be offset “by potential redirection of trade and production.”
Mariasingham noted that for the services sector, it would feel positive effects albeit small, but warned that the business services would be negatively affected if conflict escalated.
He also reminded countries benefitting from the US-China trade war not to be complacent as they need to compete with others, noting that some of the positive effects of the friction “may take a while to play out.”
Mariasingham presented his observations during a recent public symposium jointly organized by the Philippine Institute for Development Studies, Philippine APEC Study Center Network, and Chung Hua Institution for Economic Research. — www.portcalls.com