What the newly-elected Biden-Harris administration means for Philippine-USA Relations and the Philippine Economy.
Written by Piper
About 4 months ago, the battle for presidency between Joe Biden and Donald Trump was at the forefront of our minds, and on the front page of every newspaper article even to this day in February 2021. However, even as Biden and Harris prepare to follow through on their promises on the other side of the world, their decisions are not without impact on our very own country — the Philippines.
For the last 51 years, Joe Biden has been under the political limelight. He was first appointed as a Council Member for Delaware’s New Castle County in 1970, before his ascension into the role of a Senator (D-DE) in 1973, Vice President in 2009, and now, US President in 2021. While we cannot be certain as to what policies he will approve in the Oval Office, his statements from previous positions suggest that his agenda will aim to lessen protectionism. He was a big supporter of the North American Free Trade Agreement and was adamant that China join the World Trade Organization (WTO). He, too, remains a critic of Trump’s “America First” tariff mentality.
For the Philippines, less protectionist policies could increase global trade and economic growth. This could potentially be the result of a decrease in the likelihood of war between China and the United States (China being the main victim of US protectionist policies). With tensions and regulations easing between them, businesses are projected to experience fewer barriers and hurdles. There will be more confidence and less uncertainty for the Philippine economy, which will likely attract foreign investments. Biden’s reduced emphasis on “America” being “first” will likely forge a path for global cooperation and international unity.
There is, however, an opposing perspective. Under Trumpism, the tariffs placed on China may have caused a significant decrease in the ability for the US to obtain supplies needed for production, and other external goods. Because of this, the US had to rely significantly on other countries, particularly those in the ASEAN. This directly increased exports and incomes. Figures from a 2018 study conducted by the Asian Development Bank (ADB)deduced that the Philippines could potentially face a 0.2% increase in GDP and 1.6% in exports. With Biden easing protectionist policies against China, this will definitely not happen.
Biden has also been hard at work to provide qualifying US citizens with the stimulus checks in which his predecessor, Trump, has left at an impassé. The US is one of the Philippines’ largest trading partners, sources of investments, and export markets. Therefore, not only can we expect an improvement in its current account balance from an increase in American income, spending, and renewed demand for Filipino goods, but also an increase in trade agreement opportunities. The same can be said for imports, exports, remittances, and the Philippines’ BPO (business process outsourcing) sector, which is expected to comprise 15% of the total global outsourcing market by 2022.
There are opposing views as to how the Philippine and US relations will progress moving forward. Some predict improvement, suggesting that Biden’s newly found emphasis on cross-continental relationships will bring him to begin nurturing and rectifying international relations starting by re-aligning himself with the Philippines as a “traditional” ally. There are claims that he is in a comfortable position to offer more funding and foreign aid to advance diplomatic and business relations, using the money acquired in the US International Development Finance Corporation (DFC).
Others predict damage. Duterte is well-known for his notorious Drug War, a war involving extrajudicial killings that have seemingly escalated with time. With more than 12,000 casualties — some guilty, and others uncertain — Duterte has been condemned by many for his constant violation of basic human rights, and Biden’s administration will be no different. If Duterte attempts to continue his behaviour, this might cause a Philippine Human Rights law to be invoked by the US Congress, which will end US military aid to the Philippines immediately and worsen relationships with the US.
Finally, there is Biden’s commitment to saving and improving the environment. Biden has placed climate action at the top of his priorities and promised $2 trillion of expenditure on simple energy and clean infrastructure, specifically for transportation and electricity. His adamance to mitigate climate change and reduce emissions by 2050 may lead to more partnerships and collaborations between the Philippines and the USA, specifically through an increase in climate financing to stop compromising limited resources. Additionally, by rejoining the Paris Agreement, the USA will help place a cap on the rise in world temperature (<1.5°C). This will likely result in a morale boost and incentive for other countries to do the same, according to experts from inquirer.net. When the urgency and importance are understood by people across the world, nations like the Philippines, who are left vulnerable to shouldering the natural disasters caused by foreign emissions, can get back on their feet.
In closing, we expect to see many changes to key policies under the new administration. These will include many new changes alongside the main ones mentioned above. Therefore, as Biden’s policies begin to take shape, and much of the effects on the Philippines hangs in the balance, we can only ask one thing: will we suffer or prosper as a result?
