After pain, long-term Asean gain in US-China trade row
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RADE tensions between the United States and China, especially under a Trump Presidency, could escalate and may initially cause “pain” but could eventually present opportunities for Asean economies, according to a London-based think tank. However, Oxford Economics said higher tariffs could lead to more expensive consumer goods in the US, resulting in faster inflation. Such a scenario could again prompt the Federal Reserve to raise rates, which could affect monetary policy in Southeast Asian countries, especially the Philippines.
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“We expect lower real exports and economic growth, and weaker Asean currencies against the US dollar. However, trade diversions may help mitigate the initial fallout,” Oxford Economics said. In the near term, higher tariffs will also cause a slowdown in global economic growth. This means Asean goods will also suffer from low global demand. Oxford Economics noted that should Trump call for higher tariffs on Asean goods, this would also affect growth in these economies. The only difference would be in the degree of exposure of these economies to the United States. In 2023, Cambodia’s exports
were the most exposed to the US at 39.1 percent followed by Vietnam at 27.4 percent; Thailand, 17 percent; Philippines, 15.4 percent; and Malaysia, 11.3 percent. “Another risk to the scenario is that, regardless of who takes the White House, there is already more scrutiny on Southeast Asian goods to the US which could manifest in greater anti-dumping tariffs,” Oxford Economics said. “ W h i le t hese t a r i f f s a re typically concentrated on just one or two product lines at a time, the composition of exports of a Southeast Asian economy means that the effect on regional economies may be significant,” it added.
Higher US tariffs will also lead to weaker Asean currencies versus the US dollar. This will also prompt monetary policy action on the part of the central banks in the region. Faster inflation in the US may lead to higher interest rates, causing the dollar to strengthen. This will be an inflection point for Asean central banks to also make a move to defend their currencies. Oxford Economics said countries like the Philippines are more sensitive to the US policy rates and dollar movements. This is despite the declaration of the Bangko Sentral ng Pilipinas (BSP) that these
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Tuesday, September 24, 2024 Vol. 19 No. 343
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‘PHL INFLATION TO EASE WITH WEAK OIL PRICES’ By Cai U. Ordinario
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@caiordinario
ILIPINOS burdened with high prices could get some reprieve as the weakness in global oil prices is expected to have a significant impact on local inflation, according to Australia and New Zealand Banking Group’s think tank.
Among select Asian countries, the Philippines and Thailand will see the biggest slowdown in inflation due to cheaper oil prices, ANZ Research said. A 5-percent decline in pump prices will lead to a decrease of 0.12 percentage points in inflation in the Philippines and 0.30 percentage points in Thailand. “The inflation effect will also depend on the basket weight of vehicle fuels. [The data] shows our estimate of the drag from the pump price channel on the September inflation prints assuming local prices stay at current levels,” ANZ Research said. “Thailand is likely to see the biggest decline, given the high share vehicle fuels have in its inflation basket. While the Philippines has seen the largest fall in pump prices, vehicle fuels make up a smaller share of its inflation basket,” it added. Based on the Consumer Price Index (CPI), transportation has a weight of 9.03 percent. According to ANZ Research, vehicle fuel weight in the inflation basket is 2.4 percent. ANZ Research showed that this is lower than
MAGNA CARTA SETS SAIL The Seafarers’ Memorial outside the International Maritime Organization’s headquarters in London honors seafarers worldwide. Created by sculptor Michael Sandle for the IMO’s 50th anniversary, the sculpture
features a cargo ship and was unveiled on September 27, 2001. The Magna Carta of Filipino Seafarers became law on Monday as Republic Act 12021. During the plenary session on September 23, 2024, Senator Raffy Tulfo praised President Ferdinand R. Marcos Jr. for supporting the legislation, stating, “Despite the long and turbulent journey, the Magna Carta has finally reached its destination,” highlighting its importance in protecting seafarers’ rights and welfare. ANYAIVANOVA VIA DREAMSTIME.COM
See “Inflation,” A2
DA SEES NO RICE SHORTAGE DESPITE STORM FARM DAMAGE
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ESPITE the mounting agricultural damage from recent typhoons, the Department of Agriculture (DA) is confident there will be no rice supply shortage, as production for the local food staple is projected to still reach 20 million metric tons (MMT) this year. In a briefing in Malacañang on Monday, DA Assistant Secretary Arnel V. de Mesa disclosed the damage to rice production from the initial typhoons this year is only 420,000 metric tons, which is still within their target. “We expect 400 to 600 thousand metric tons of losses every
year. So, these losses are within the limit we expect and we expect we will be able to harvest 20 million metric tons for this year.” Data from the Philippine Statistics Author ity (P SA) showed rice production during the first quarter of the year reached 5.24 MMT and 4.69 MMT from April June. As of August, PSA said the country’s total rice stocks inventory was at 1.87 MMT.
Rice imports
THE existing rice supply is See “Rice,” A2
After detours, Magna Carta for Seafarers finally a law By Samuel P. Medenilla @sam_medenilla &
Jovee Marie N. Dela Cruz @joveemarie
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ECOGNIZING the significant contribution of Filipino seafarers to nation-building, President Ferdinand Marcos on Monday signed Republic Act 12021 or the Magna Carta for Seafarers, the new landmark piece of legislation for enhancing the protection and welfare of sailors. “It is our way of telling our seafarers, ‘We see you, we hear you, and we are here to support you,’” Marcos said at the ceremonial signing of RA 12021 in Malacañang last Monday.
Thenewlawcreatesacomprehensive framework for ensuring seafarers receive fair wages, enjoy safe working conditions, and protecting them from illegal recruitment. Among its salient provisions is designating the Maritime Industry Authority (Marina) to oversee maritime education as well as “establishing mechanism, rules, and procedures to ensure fair, speedy, equitable, just disposition and execution of decisions.” This includes the implementation of a controversial “bond,” wherein the seafarers must first win in the appeal from their employers before their See “magna carta,” A2
PESO EXCHANGE RATES n US 55.5550 n JAPAN 0.3860 n UK 74.0159 n HK 7.1314 n CHINA 7.8824 n SINGAPORE 43.0692 n AUSTRALIA 37.7885 n EU 62.0216 n KOREA 0.0417 n SAUDI ARABIA 14.8060 Source: BSP (September 23, 2024)