By Charmaine A. Tadalan, Reporter
and Denise A. Valdez, Senior Reporter
THE PHILIPPINES will likely see stronger relations with the United States after Joseph R. Biden, Jr. was elected US president on Saturday.
In his first speech as president-elect, Mr. Biden vowed to act swiftly against the coronavirus disease 2019 (COVID-19) pandemic and fix the ailing economy. (See ralated stories: Palace says Duterte to work with Biden based on respect, US president-elect Biden calls for healing, unity)
Under the Biden administration, economists and analysts see the United States rejoining the Trans-Pacific Partnership (TPP) trade deal, combating climate change and pushing economic initiatives in the Asia-Pacific region.
John D. Forbes, American Chamber of Commerce of the Philippines (AmCham) senior adviser, said the leadership of Mr. Biden would have a gradual positive impact on the Philippines.
“The US taking climate change and COVID-19 seriously will surely benefit the Philippines. US grant assistance for the Philippines should be steady, as will support for Philippine rights in the West Philippine Sea,” Mr. Forbes told BusinessWorld.
Mr. Biden has said that on his first day in office, the US would quickly rejoin the Paris climate accord.
“AmCham will continue to advocate for a bilateral or plurilateral free trade agreement and encourage the Philippines to join the CPTPP (Comprehensive and Progressive Agreement for TPP),” Mr. Forbes said.
But US investments in the country would depend on pending reforms that seek to open up the economy, he added.
The Obama administration had conducted negotiations for the TPP, which was touted to become the third-largest free trade area in the world by GDP. Under the Trump administration, the US pulled out of the trade deal in 2017. Only 11 countries signed the CPTPP in March 2018. The Philippines did not join the TPP as well.
Foreign policy expert Richard J. Heydarian said the Biden administration’s inclination to rejoin the TPP would likely benefit the Philippines even as he expects it to be “cautious and pragmatic.”
“Most likely Biden would push for the restoration of the Trans-Pacific Partnership agreement under US leadership. We already have a version of that under Japanese leadership, but a more expanded version of that, that could include Indonesia, Philippines or even Taiwan and South Korea, could be very much in the cards,” Mr. Heydarian said over the phone on Sunday.
Economist George Manzano of the University of Asia and the Pacific said Mr. Biden’s multilateralist foreign policy approach could lead to increased US participation in global institutions such as the World Trade Organization.
“So, in terms of dealing with the US economy on trade policy matters, we can bank on the WTO rather than just dealing with the US economy,” he said over telephone on Sunday.
Under Biden, the US is expected to take a less aggressive approach to China, which would open opportunities for the Philippines.
“The Biden administration will be less aggressive or less hawkish on China. In a sense, if there’s more trade between the US and China, the Philippines will also prosper… China will be importing more or building more subcontracting possibilities with the Philippines,” Mr. Manzano said.
Mr. Heydarian also expects the US to introduce infrastructure investments to counter China’s influence. The Philippines may benefit from increased trade and investment flows, but this will depend on President Rodrigo R. Duterte addressing possible US concerns.
“There will be an effort to restore and revitalize the alliance in the final year of President Duterte to set the tone for the next Philippine president come 2022,” he said.
Meanwhile, the local stock market is hoping to get a boost from the positive investor sentiment surrounding Mr. Biden’s victory.
Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said Mr. Biden’s global-centric approach would be better for the world economy and the Philippines, unlike Mr. Trump’s America-first policy.
Trade tensions with China will also likely ease under the Biden presidency.
“(The Philippines) already has strong investment and trade relationships with China. If (Mr.) Biden takes a soft stance on this one, then it’s going to help the Chinese economy, which in turn could be positive for the local economy,” Mr. Tantiangco added.
“(Mr.) Biden’s apparent softer stance on China will alleviate some pressures that have been hounding emerging markets since the trade war started some years ago,” Manuel Antonio G. Lisbona, president of PNB Securities, Inc., said in a mobile phone message.
Democrats are also historically supportive of free trade, Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said.
“As seen in the past Democrat administrations, they are not disruptive on trade relationships, thus would not create uncertainty in terms of global growth including our local economy,” he said in a text message.
The Management Association of the Philippines (MAP) noted that Mr. Biden could help improve global relations during the pandemic.
“We nurture the hope that he will lead America with steady hands in this difficult time given the enormous challenges, like reviving the virus economy, healing the divide in the nation and across nations,…and strengthening global cooperation, peace and stability,” MAP President Francisco E. Lim said in a statement.
However, there is a possibility that the Biden administration may raise corporate and income taxes.
“If (Mr.) Biden eliminates current tax cuts, we may see a plateau in remittances from the US, which is the biggest source for the Philippines,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in a text message. — with inputs from Jenina P. Ibañez