THE BLOG
11/28/2016 03:11 pm ET Updated Nov 29, 2017

Why The Philippines Stands To Lose From Donald Trump's Victory

On November 9, 2016, Philippine President Rodrigo Duterte emphatically congratulated Donald Trump on his victory in the United States presidential elections. Duterte jokingly claimed that he would forge a durable partnership with Trump due to both leaders' propensity to "curse at the slightest of reasons." To underscore his commitment to an improved relationship with Washington, Duterte pledged to continue joint military drills with the United States in the South China Sea.

Even though Duterte has been significantly more conciliatory towards Trump than towards his predecessor, Barack Obama, predictions of a revival of the long-standing US-Philippines alliance are not supported. An in-depth analysis of Trump's policies towards the Philippines reveals many potential sources of tension between Washington and Manila.

Many Philippine economists and policymakers fear that Trump's trade and immigration policies could seriously weaken the Philippine economy. Trump's transactional approach to US security partnerships in the Asia-Pacific region and confrontational approach towards China could also dash hopes for a revived US-Philippines security partnership.

The Economic Implications of Trump's Election on the Philippines

During the 2016 presidential election campaign, Trump frequently decried US-based multinationals for outsourcing jobs overseas and advocated protectionist policies to bring manufacturing jobs back to the United States. While it is unclear whether the most radical elements of Trump's agenda will be approved by Congress, even a partial implementation of Trump's confrontational trade policy agenda will have pernicious consequences for the Philippine economy.

Economists Euben Paracuelles and Lavanya Venkateswaran recently predicted that a Trump presidency could result in a reduction of the Philippines' current account surplus and lower revenues for the Philippine manufacturing sector. As many Filipino guest workers in the United States are undocumented, Trump's restrictive immigration policies could also have profoundly negative consequences for the families of Filipinos working in the United States.

According to the Philippine Statistics Authority, remittances from the United States totaled almost $6 billion in the first seven months of 2016. As remittances from the United States constitute 30% of the Philippines' total cash remittance inflows, Trump's hardline opposition to outsourcing will damage the Philippines' financial position.

Trump's ascension to the presidency has already eroded international confidence in the Philippine economy. On November 15, US credit ratings giant Moody's announced that Trump's trade policies would adversely impact the Philippines' credit rating and make it more difficult for Duterte to respond to a remittance decline with fiscal stimulus measures.

As Duterte made increased infrastructure spending and tax relief major planks of his economic platform during May's presidential election, Trump's policies will likely have negative implications for the US-Philippines relationship. Duterte's willingness to incite anti-American nationalism is also a cause for concern.

If Duterte concludes that Trump is obstructing his domestic agenda, he could rally Filipinos around an economic separation from the United States and an even firmer pivot towards China. A hardline anti-Trump stance over the migrant workers issue would gain political support in the Philippine parliament. In August 2016, Trump's reference to an illegal Filipino migrant who plotted to join al-Qaeda and the Taliban to commit terrorist attacks prompted calls for Donald Trump to be banned from entering the Philippines.

Despite the intense reactions that surround the migrant workers issue, the extent of any potential rupture in the Philippines-US alliance depends largely on Trump's willingness to follow through on his campaign promises. This uncertainty has prevented a mood of panic from descending on Manila. Some Philippine Senators have publicly declared that Trump's post-election conduct is proof that he is veering towards a more moderate course. Duterte has also publicly stated his belief that Trump will adopt a fair immigration policy.

The appointment of Trump Organization business partner Century Properties Group founder Jose EB Antonio as the Philippines' special envoy to the United States could also convince Trump to give the Philippines softer treatment than China or Mexico. These mitigating factors could ultimately result in the creation of a Washington-Manila alliance; but the unpredictability of Trump's immigration policy agenda makes a definitive evaluation impossible at this stage.

Implications of Trump's China Policies on the US-Philippines Relationship

Even though Donald Trump's strident criticisms of China have primarily been directed at Chinese currency manipulation and trade policy, the President-elect has also hinted at transitioning the United States to a more aggressive foreign policy in the South China Sea. In April 2016, Trump criticized the Obama administration for passively allowing China to build a "military fortress" in the South China Sea. Trump also argued that Chinese expansionism was a product of Beijing's disrespect for the United States.

If Trump's proposed defense spending increases are implemented, his rhetoric suggests that some of these new military resources will be directed towards more confrontational military posturing against China. Some US defense analysts believe that a greater US show of commitment to the security of the Asia-Pacific region could convince the Philippines to re-establish its former military alliance with Washington. Trump's unwillingness to attach human rights strings to a US military alliance offer will also appeal to Duterte, as the Philippine president's violent anti-drug campaign shows few signs of slowing down.

As Duterte fiercely opposed Chinese military incursions on the Spratly Islands during his election campaign, it is possible that a compelling set of security guarantees from Washington could cause the Philippines to scale back its pivot towards China. Philippine Defense Secretary Florin Lorenzana, an establishment figure with close ties to the Pentagon, could act as an effective mediator between Duterte and Trump in this scenario.

However, Trump's transactional approach to American military alliances in the Asia-Pacific region could undermine the prospects of a long-term thaw in US-Philippines relations. As US State Department spokesman John Kirby noted on October 1, the United States currently provides the Philippines with $180 million in annual aid. While Duterte has insisted that the Philippines can survive without US military assistance, many international observers remain skeptical. The Philippines' security situation would become more precarious if Trump ordered the Philippine government to pay the United States for defending the Philippines against Chinese aggression.

As the Philippines is in the process of expanding its arms contracts with Russia and China to reduce Manila's dependence on US military technology, Duterte will likely object strongly to a conditional defense offer from Washington. Trump could retaliate for a non-payment by Duterte for defense by threatening to withdraw US troops from the country. Even though the Philippines is concerned by the security risks associated with Chinese expansionism, Duterte's fear of antagonizing China could cause him to call Trump's bluff and deal a massive blow to the United States' pivot to Asia strategy.

Even though early signs suggest that the US and the Philippines are on the cusp of reviving their historic alliance, an extrapolation of Trump's policies towards Manila from his campaign rhetoric suggests that this optimism might be misplaced. As the Washington-Manila relationship is at a crossroads, Trump's willingness to modify his campaign pledges while in office will have a major impact long-term trajectory of the US-Philippines economic and security partnership.

Samuel Ramani is a DPhil candidate at St. Antony's College, University of Oxford. He is also a journalist who writes regularly for the Huffington Post and Washington Post. He can be followed on Twitter at samramani2 and on Facebook at Samuel Ramani.