Trump win bad for Bohol economy?

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Trump win bad for Bohol economy?

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Trump Bohol

Commentary:

BPO, OFWs, Trade and Tourism under threat 

By Bingo P. Dejaresco III

The shocking win of Republican business mogul Donald Trump as the 45th president of the most powerful nation, the USA, may not be good for Bohol based on his campaign pronouncements.

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The flamboyant Trump, bereft of any public office exposure, trounced favored Democrat candidate Hillary Clinton in a 279-228 electoral vote win.

Unfortunately, his policies are anchored on rabid “America for Americans” slogans, anti-immigrant, isolationism, xenophobia, anti-globalization statements and no more global Robocop role affirmation.

BPO (Business Process Outsourcing)

Just as the multi- million PLDT fiber optics investment was defusing technical glitz and summits created to bring back Bohol as  as ’emerging BPO site” , the brash president -elect had vowed to heavily tax those American companies steeped in outsourcing jobs abroad like  those going to the Philippines.

For Bohol with schools churning out qualified call center employees with acceptable English diction and grammar and Bohol offering an R and R (rest and recreation) arm for BPO expats, Trump’s card struck like a thunderbolt. An upside of billions in earning potential from PPO activities here appear threatened today.

In 2015, the Philippines became the No 1 BPO nation-outlasting India with 1.2 million employed and earning US$22-Billion or 10% of the country’s GDP (Gross Domestic Product). At the sidelines are financial giants like Morgan Stanley, Mitsubishi and Goldman Sachs, among others, waiting to use our BPO talents and facilities.

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Another 250,000 new BPO employees were projected to add to the 1.2 million this year.

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On balance, the American companies will still have to compute whether the new Trump taxes will be offset by the savings they incur by using BOP in RP with its attendant low labor cost, labor availability and language proficiency.

But leakages will hurt because more than half of the BPO RP clients are USA-based.

OFW REMITTANCES

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Local Bohol bankers will publicly admit that the strong deposit build-up in their banks and the new found prosperity displayed in brand new cars and homes spring from OFW remittances. In many Boholano households there are many OFWs counted among the 10 million abroad.

America, along with Middle East countries like Saudi Arabia, United Emirates, Qatar and Kuwait, Asia’s Singapore, Hong Kong and Japan and Europe’s United Kingdom are the main sources of Philippine OFW remittances.

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In 2015, out of the US$25.7-B remittances, some US$10.4 Billion came from the USA. The actual figure could be higher if one includes the informal and unrecorded dollar inflows.

It is feared that Trump’s xenophobia, anti-immigrant stance and possible stricter migration rules can weaken the remittances from the USA. Recall that for the 4 million legally documented Pinoys in the USA, there are still 300,000 of our TNT countrymen facing immediate deportation from there once the Donald calls his trump card.

The country has benefited immensely from these remittances over these years. It is because the nation is No 3 in the world in terms of these inflows next to India’s US$72-Billion and China’s US$63-Billion.

But one must consider that the country only has 100 million population while both China and India have over a billion people each.  That is how big a ratio of the Filipino families are dependent on remittances abroad.

TOURISM: No 3 DOLLAR EARNER

Tourism, Bohol’s flagship industry, is the country’s No 3 dollar earner at (2015) US$ 5-B bringing in 5.2 million tourists.

America is next to South Korea as the nation’s top tourists -followed by China, Australia, Singapore and Taiwan in that order. In Bohol, although the Koreans, Chinese and Japanese are heavy in influx, America remains an important western source of visitors.

Unfortunately, the Republican maverick had labeled the country as a hotbed of terrorists (primarily due to the heavy presence of the Abu Sayyafs in southern Mindanao) and America had recently issued an adverse travel advisory for southern Cebu.

Will Trump’s hostility to RP have a bearing on his people’s appetite to visit the country.

The comfort is that the 4 million Pinoys there have close links with home and do travel as a matter of course -not necessarily as mere tourists. China could also be our “ace card. That group has shown an 18% annual average tourist growth rate in RP and the recent visit of the president Digong sparked a new hope that 1 million Chinese will visit the Philippines in the next 12 months.

TRADE BARRIERS AND ISOLATIONISM?

President elect Trump does not believe in Free Trade and will likely produce trade and tax barriers to protect American industries.  He wants out of NAFTA and is likely not to okay the proposed transpacific free trade accord among 12 nations.

Right now, America, next to Japan is the Philippine’s biggest trade partners. Our major exports have been electronics, garments, coconut oil and some fruits.

Will USA’s trade belligerence affect our products? China again is the wild card- where its more than a billion consumers can be a potential RP market and “friendly overtures” in the Panatag Shoal could yet mean reopened vast fishing grounds and perhaps multi-lateral oil exploration in that controversial area.

On the military front, the USA is moving its pivot out of military involvement in overseas powder keg points.  But  she is expected to honor existing security treaties including those done with the Philippines. Or will the reluctant global Robocop cop out this time courtesy of Donald Trump?

CONCLUSION 

To be sure, the grating and sharply divisive victory of Donald Trump , to say the least, will have telling effects on the national economy and the local Bohol economy as well. Is there light at the end of the tunnel- or is it an oncoming, hurtling train we are seeing?

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