Are the Philippines still relevant to the USA?

Are we still relevant to the USA?

By Fidel Abalos - The Freeman - January 25, 2025

https://www.philstar.com/the-freeman/cebu-business/2025/01/25/2416737/are-we-still-relevant-usa

Buried in the euphoria of a record-breaking Sinulog Festival 2025 was the reality that US President Donald Trump shall reign and rule the most powerful country on Earth.

As the euphoria dies down, we have to face the realities that possibly there could be changes in US policies that may harm us economically or territorially.

As a starter, on day one, he made true his promise to deport undocumented or illegal migrants. Just fine, if they are. But how should that be defined? Will that include those who are still processing their green cards or permanent residency?

As our country’s ambassador Jose Manuel Romuladez reported, there are between 320,000 and 350,000 (or even beyond such number) that can be potentially deported.

This policy will have a huge impact to the country. For one, out of the US$34.61 billion total remittances of our Overseas Filipino Workers (OFWs) from January to November 2024, 40.9% came from the USA.

If some of our countrymen shall be deported, that amount will substantially decrease. Knowing fully well that their remittances are the lifeline of thousands of families, consumer spending will go down as well. When it goes down, our economy will surely suffer

Secondly, President Trump’s “America First” slogan is quite threatening as well. For the time being, his emphasis is on products, not services. With all certainty, he said that it is either they manufacture the products in the USA or face tariffs. Canada is, in fact, with its oil export to the USA, won’t be spared. He is not holding his punches, it seems, despite the fact that these tariffs will make these commodities expensive to the Americans. Anxiously, the USA happens to be our largest export market too.

We have yet to hear though an official pronouncement about his plans on USA’s outsourced services. Estimated to generate around US$38 billion in 2024, this one will really hit us. Again, lest we might forget, one of Trump’s favorite slogans is “America first.” To some extent, it could mean “insourcing” (as opposed to outsourcing) or bringing jobs back to the USA.   

Last year’s report of the reputable Nomura Global Markets Research confirmed this. It said that the “Philippines is considered the most vulnerable among ASEAN nations due to the country’s close ties with the US and its reliance on the American market.”  Why?  Because Trump is expected to revive the same thing he did in his first term.

Moreover, it said that Trump plans to tighten the US immigration policy (just like before). “By the same token, remittances growth also slowed during Trump’s (first term), suggesting that a tightening in US immigration policy might affect workers’ remittances from the US which are even more sizable,” it added.

That in-sourcing or bringing back jobs to America will affect BPO revenues is a fact.  According to Nomura, such was the case during Trump’s first term as “services exports growth to the US halved to 5.1 percent from 2017 to 2019 compared to prior years.”

Obviously, therefore, if President Trump make true his threat of bringing back outsourced jobs to the USA (as he did during his first term), this industry will certainly suffer. Considering the significance of its contribution, logically, the country’s economy will be badly hit.

Notably, according to Nomura that if these risks (resulting to slowing down of BPOs and remittances if he wins) materialize, the country’s “gross domestic product (GDP) growth could lower by 0.2 percentage points.”

If these risks, indeed, materialize, we can still find some solace in the fact that our economy is expected to grow by 6.1% in 2025. However, the truth remains that some of the employees in the outsourcing industry will be directly hit.

Lastly, the most concerning of all are the skirmishes at the West Philippine Sea. With Trump’s adoration towards dictators, will the USA protect us from China’s future aggression?  Lest we forget, not long ago, he encouraged Putin to attack any NATO country (that doesn’t spend a minimum of 2% of its GDP on defense).

On the other hand, it is a fact that China is a big threat to the USA militarily and economically.

Strategically situated to counter China’s military might, is there a possibility that we shall stay relevant before President Trump’s eyes. If so, then, we can take a sigh of relief

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