Philippines' Economy Fails to Diversify Amid US-China Trade Tensions

The Philippines' economy is facing significant challenges due to its reliance on the US market. With the ongoing trade tensions between the US and China, the country's economic growth has been lagging behind that of its ASEAN neighbors. According to an ASEAN GDP per capita ranking, Singapore leads the region with a projected GDP per capita of $64,142 in 2026, followed by Brunei and Malaysia.

Vietnam, which shares a border with China and has had territorial disputes with it, has chosen to pursue economic growth through mutual benefit agreements with its neighbor. This approach has allowed Vietnam to post an impressive 8.1 percent growth for the first half of this year. In contrast, the Philippines' economy grew by just 2.3 percent during the same period.

Experts attribute the Philippines' sluggish growth to its failure to diversify its economic engagements. Frederic Neumann, chief economist at HSBC, stated that 'there needs to be an ongoing push to diversify economic engagement.' He suggested exploring partnerships with Europe, Australia, New Zealand, Japan, China, India, and Africa.

Former banker Antonio Moncupa echoed this view, saying that the country should not choose between its relationships with the US and China. Instead, it can maintain good relations with both countries without antagonizing either one. He noted that neighboring countries such as Malaysia, Indonesia, Thailand, India, and Vietnam have successfully diversified their economic engagements.