Should the trade war between China and the US continue, this could hurt the country’s economy in the long term.
“In the short run, we are not directly affected by this trade war because we don’t export steel and aluminum. But in the medium to long run, if this trade war will already hurt the growth of the global economy and will have adverse impact on our export markets, then we will be affected,” said Socioeconomic Planning Secretary Ernesto Pernia, in an interview yesterday.
The Philippines enjoys the General System of Preference privilege with the US, covering 3,500 product lines that enter the US market at zero percent duty.
The Neda official further said the Washington-Beijing trade skirmish could also hurt the appetite of global investors.
“Meantime, we are hoping that the leaders of these two big countries will come to their better senses. Otherwise, this will have a domino effect,” said Pernia.
The US is imposing a tariff of 25 percent on $50 billion worth of exports from China, which, in turn, announced retaliatory moves against the US.
Pernia is optimistic the country would hit its growth target of seven to eight percent this year, on the back of the massive infrastructure projects and strong consumption.
The country’s second quarter growth results will be released next month.
Pernia said the economy remains healthy and is on track to hit its growth targets.
“The government is spending quite strong on infrastructure. There is no underspending and consumption remains high,” he said.
Pernia said the country must sustain the Build, Build, Build momentum to reap positive gains such as employment generation.
Some 35 infrastructure projects have been approved by the Neda Board, of which 16 are estimated to be completed by 2022, while the remaining 19 projects will extend beyond 2022.
This year, Neda expects around 820,000 jobs to be generated with a number of infrastructure projects breaking ground.
While inflation reached slightly above the target at 5.2 percent last month, Pernia said they expect inflation to start tapering off towards the third to fourth quarter this year as fuel prices go down and other factors begin to stable.
The Neda official said the high inflation is due to high price of fuel in the world market, depreciation of peso relative to the dollar and other internal factors like rice supply storage.