Exclusive | As US-China trade war intensifies, Philippines seeks to balance ties and even benefit from mounting tensions
The Philippine government is poised to award a contract to rebuild the city of Marawi to a Chinese state-owned firm but has emphasised there is no risk of falling prey to a ‘debt trap’
The US-China trade war has sent a ripple of uncertainty through the global economy but there may be a silver lining for the Philippines, even as it seeks to balance its ties and chart a middle path between its two most powerful partners. The upshot, according to government officials, is that increased infrastructure spending will eventually allow the Philippines to become “the workforce for the entire world”.
According to Ernesto Pernia, the country’s socioeconomic planning secretary, the US-China trade war should benefit the Philippine economy, helping increase exports by 5 per cent as the country becomes an alternative source of products and even a site for supply chains.
There are already signs electronics and computer components, previously sourced from China, are now coming from the Philippines. Pernia told the South China Morning Post exports would rise by a net US$34 million this year, and US$50 million next year.
There is a “strong possibility” some supply chains will permanently shift from China to the Philippines but the government currently has no hard data on whether this is already happening, he added.
Another senior government official told the Post “there are foreign [non-Chinese] companies transferring from China to the Philippines because of the trade war”.
