THE Board of Investments (BoI) said it is expecting a “small” benefit from the US-China trade war but is working to capture more investment from relocating firms seeking to evade tariff coverage, particularly the steel industry.
“We will benefit. It will be small compared to other countries — that’s what we need to fix,” BoI Executive Director of Industry Development Services Ma. Corazon Halili-Dichosa said at the Philippine Institute for Development Studies’ 5th public policy conference Thursday.
She cited a World Trade Organization study showing that among ASEAN nations, the Philippines is expected to be the least affected by tariff measures imposed by the US and China.
But Ms. Dichosa said that the Philippines competes with ASEAN member countries exporting similar products to the same economies — the US, EU, China, and Japan.
Companies are fleeing the China in response to US tariffs, but a Nomura study found that most are transferring to larger export economies like Vietnam.
Ms. Dichosa said that BoI has been working to attract more of the investment. She expects the electronics sector to benefit most if the industry extends beyond assembly services to higher value services.
She also expects more investment in steel, which is among the first industries to be impacted by US trade war tariffs, particularly from Chinese steelmakers.
“The Chinese think that ‘maybe if we go to the Philippines and export to the US,’ that will actually solve their problems in terms of accessing the US market for steel products,” she added.
Ms. Dichosa said that ASEAN countries attracting relocating businesses have strong infrastructure and logistics.
“In solving the trade deficit and to see how we can benefit more from the US trade war, we think the best strategy is a robust industrialization strategy,” she said.
She also noted that a Philippine-US free trade agreement is in the works.
Noting that the Philippines will not follow the US and China in adopting protectionist measures, Ms. Dichosa said she backed seamless global trade through the lowering of tariffs, with the exception of some tariffs to “level the playing field.”
The Department of Trade and Industry has recently imposed special safeguard duties on imported cement. — Jenina P. Ibañez