PH can leverage alliance with US under Trump — analysts, observers

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The Philippines can still squeeze some benefits from its close ties with the US under the Trump administration, and suggestions to capitalize on the US ally-shoring strategy may be worth considering, political observers and analysts said.

Donald Trump is set to take his oath Monday night (Manila time) as the 47th US president. It would be his second chance to serve the country as president, after having been previously elected as the 45th US president.

Jonathan Ravelas, managing director at eManagement for Business and Marketing Services (eMBM), said the suggestion by Tereso Panga, Philippine Economic Zone Authority (PEZA) director-general, to capitalize on the US’ ally-shoring strategy “is worth considering.”

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Ally-shoring is a process by which countries rework critical supply chains and source essential materials, goods, and services among and between trusted democratic partners and allies. The focus is on investing in short and long-term relationships that protect and enhance joint economic and national security, according to the US-Mexico Foundation.

“The close relationship between the Philippines and the US has historically been beneficial, and leveraging this alliance could attract substantial investments. Ally-shoring, where countries favor business with allied nations, could present a significant opportunity for the Philippines,” Ravelas said.

He said the strong diplomatic and economic ties can be used as leverage to support “confidence in creating a more favorable business environment.”

Existing trade agreements and mutual interests in economic growth can provide a solid foundation for such a strategy, he added.

“It is essential to ensure that the country continues to build and strengthen relationships with other nations to diversify investment sources and not rely solely on one ally. Diversifying the investor base can help in creating a more robust and resilient economy,” Ravelas said.

Astro del Castillo, managing director at First Grade Finance Inc. said enhanced military and economic ties will “surely benefit our country.”

“The commitment from both nations to strengthen their alliance presents an opportunity for the Philippines to assert itself more confidently on the global stage and could result in attracting more investments and partnerships,” he said, noting that this is more so given the rising tensions with China and the ever-changing geopolitical landscape in the Indo-Pacific region.

“If managed and planned well, we could be a major player in the US supply chain given a more vibrant relationship with the US,” he said, adding that among the sectors that could benefit are infrastructure and energy, manufacturing, technologies including information technology, and possibly agriculture.

Brokerage firm Abacus Securities Inc., however, noted that the Philippines already enjoys preferential treatment in its trade with the US.

In an investor’s note issued in early December last year, Abacus Securities said that while free trade has been on the agenda of most presidents since the first Aquino administration, “the net benefit for the Philippines might not be that large.”

“Many of our exports to the US already enjoy low tariffs under the General System of Preferences (GSP) and an AFTA will take more than a year or two to craft and implement. However, if it does become reality, the country’s electronics sector may get a lift,” it said.

“Property companies or conglomerates with large industrial holdings might also see increased interest from potential foreign locators. Lastly, retailers that import a lot of inventory from the US could see a small boost to margins,” it said.

“All these are speculative at this point but the possibility is there,” the stockbroker added.

Last week, Panga in a social media post said the Philippines should leverage its longstanding trade and investment relationship with the United States amid growing fears of US trade protectionist policies by the incoming Trump administration.

This raises the likelihood of a promising US-Philippine cooperation during Trump’s term, especially since the Southeast Asian country is strategically located in the region, he said.

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