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South-east Asia and America under Trump

US-Philippines: Economy bad, politics good

The election of Donald Trump as America's next president has introduced uncertainty into ties between the world's superpower and other countries. Five scholars at the ISEAS -Yusof Ishak Institute evaluate the likely impact on key nations in South-east Asia.

Relations with the United States are deeper, broader and more defining for the Philippines than for any other country in South-east Asia.

The Philippines is the only former US colony in the region and is the most economically and militarily dependent on the US. These unique US influences are at the core of President Rodrigo Duterte's recent declaration of his personal separation economically and militarily from the US and his call for a more independent Philippine foreign policy.

These unique structural dependencies and Mr Duterte's crusade to reduce them have determined the early Philippine responses to Mr Donald Trump's victory.

Mr Trump's victory has sustained and accelerated the weakening of the Philippine peso, which has slumped to its lowest value against the US dollar since the global financial crisis eight years ago.

The Philippine stock exchange has seen all of its gains for this year wiped out. Nomura, a leading Japanese financial firm, warns that the Philippines' booming business process outsourcing (BPO) industry could suffer from Trump administration efforts to reduce the offshoring of US jobs. The Philippines is the world's largest BPO hub with a particular reliance on the US market and US firms.

Global credit rating agency Moody's has expressed concerns that a Trump administration tightening of immigration policy could hurt vital remittance flows to the Philippines.

Mr Duterte can take a very different approach to relations with Mr Trump, a US president who may focus less on human rights abuses overseas. Mr Duterte, after picking his fight with Mr Obama, has already stated that he does not want to fight with Mr Trump. There are signs and early expectations that bilateral diplomatic relations will improve to the benefit of both countries.

It is estimated that over four million Filipinos reside in the US (not all legally) and that they account for over a third of total remittances to the Philippines. There are few signs or early expectations that the Trump administration will be good for US-Philippine economic relations. The question is more how large and real the downside risks are.

On the diplomatic front, the story could hardly be more different. Mr Duterte was one of the first Asian leaders to congratulate Mr Trump and, in a later interview, reflected positively on the frequently cited similarities between himself and Mr Trump.

Mr Trump's victory offers a unique reset opportunity for the Duterte administration. Angered by the Obama administration's expressed concerns over his war on drugs, the newly elected Philippine leader labelled President Barack Obama a "son of a whore" and suggested he visit hell.

Even strong Duterte supporters have expressed concerns about the frequency and virulence of his tirades against the US and Mr Obama.

Mr Duterte can take a very different approach to relations with Mr Trump, a US president who may focus less on human rights abuses overseas. Mr Duterte, after picking his fight with Mr Obama, has already stated that he does not want to fight with Mr Trump. There are signs and early expectations that bilateral diplomatic relations will improve to the benefit of both countries.

Mr Trump's aggressive unilateralist rhetoric lambasting the US alliance system and support for free trade is seen by many Duterte supporters, and more disinterested observers like Mr Ian Bremmer of the Eurasia Group, as validation for Mr Duterte's pivot from the US to Asia.

A more distant and demanding US in Asia likely will lead Asian countries to focus more on strengthening economic ties and reducing strategic friction among themselves. This is what the Duterte administration, in its approach to China, is already doing in word and action.

Mr Duterte is committed to reducing the Philippines' dependency on the US while still professing to want good relations with the country's former colonial master.

This proved to be a very difficult balancing act in his first four months in power, with many wobbles and near falls. Mr Trump's win likely will make this much easier.

Six months ago, the election of the populist outsider candidate Rodrigo Duterte changed the direction and tone of Philippine-US relations. Mr Trump's election promises no less.


  • The writer is senior fellow, ISEAS - Yusof Ishak Institute.

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A version of this article appeared in the print edition of The Straits Times on November 23, 2016, with the headline 'US-Philippines: Economy bad, politics good'. Print Edition | Subscribe