'Domestic reforms to cushion PH from global uncertainties'

FOCUSING on domestic reforms and streamlining regulations may cushion the country from global uncertainties, particularly the protectionist policies of US President Donald Trump. Amid all the uncertainties on the proposed tariffs in the US, World Bank lead economist Gonzalo Varela said that the country needs to focus on domestic reforms. "What helps is to get better domestically, focus on streamlining regulations, focusing on improving the way markets work and focus on building better skills," Varela said during The Manila Times Economic Forum on Thursday. "So domestic reforms would be the way forward with a global economy that may be getting more sluggish and more protectionist," he added. Earlier this month, Trump raised tariffs on steel and aluminum imports. He also announced plans to impose higher tariffs on goods from Canada, Mexico and China. He also reiterated plans to impose reciprocal tariffs on other countries within two days, and said that he was looking at raising duties on cars, pharmaceuticals and semiconductor chips. The Philippines is the world's ninth-largest chip exporter according to the Organization of Economic Cooperation and Development, with the semiconductor sector the country's largest export industry. Meanwhile, Assistant Secretary to the Finance chief economist Neil Adrian Cabiles said there will be some form of trade diversion that can benefit the Philippines. "The other strategy we're looking at is that we should actually also start looking at other markets," he said, pointing to other Asean countries. "But I think what is also important to note is that ... we are not really the direct targets of these increased tariffs coming from the United States. So more or less, there's some form of insulation for that," he added. However, he stressed that there could be some regional effects that make exploring new markets very important. Sy family-led SM Investments Corp. economist Robert Dan Roces said the Philippine development plan should not be affected by the vagaries of politics. "The development plan should be insulated from that," Roces said. "So that piece of the plan should be always forward-looking and not subject to the whims of whoever is in power. It should be a sacred document that should be followed to the letter no matter who the president is," he added. This was echoed by global investment banker Stephen CuUnjieng, saying that it would be better for the country to be "friend of all, enemy of none." "Let's just look within our region. When Chinese companies wanted to second source their manufacturing, where did they go? Vietnam and Thailand," CuUnjieng said. "When Western companies wanted an Asian hub, but not in China, where did they go? Vietnam and Thailand. Because they're friends to all, enemies to none. Because circumstances change, priorities change," he added. He stressed that the country needs to be "flexible and adapt to it" at the same time it also needs to have something that could attract other countries. "We have to also be attractive to them and have something to offer. But instead of being ideological about whose side we're on, let's just be practical," he said.