The Philippines could stand to benefit from the effects of United Kingdom’s impending withdrawal from the European Union (EU)—commonly referred to as “Brexit”—rather than bear any adverse effects to its economy, according to the Nordic Chamber of Commerce (NordCham) of the Philippines.
NordCham Executive Director Joona Selin said the Philippines offers a cheaper alternative to UK businesses especially in the outsourcing industry. “Simply from an outsourcing perspective, on the short term, it [Brexit] will probably provide more opportunities for that sector to grow here. Let’s say in more dire times, companies will be looking for more cost efficiency, which oftentimes can be found in markets like here in the Philippines in that particular sector,” he said at the sidelines of the NordCham Forum titled “Trump & Brexit- What do these mean for EU and Asean?” held at the BDO Corporate Center in Makati.
Selin added that the Philippines likewise offers an attractive export market to British companies. “Since no country can only rely on their domestic market, in the case of the UK, they will need to look at what are their export markets and the Philippines can again enter the picture as a growth market, as an export destination,” he said.
Adjunct Professor of Singapore Management University and Copenhagen Business School, Jorgen Orstrøm Moller, gave the talk during the forum. He is also a noted commentator on European affairs and one of the most influential negotiators in the European Community, particularly in the areas of trade and economic affairs and a former Ambassador.
For his part, Professor Moller opined that members of the Association of Southeast Asian Nations (Asean) should take a lesson from the experience of the EU when it comes to dealing with the region’s political issues.
“The Asean can learn something from EU. Both have problems with their respective political system. People (from both regions) need to be encouraged and convinced that the democratic system works. The EU and Asean are there to solve the problems (member-) countries cannot solve on their own. But unless people believe this, they will lose interest and will not support the system,” he said.
“Actually, the benefits of globalization are more felt in Asia than in the US or in Europe. However, economy alone does not solve the problem. Education does.”
Local economic experts have already downplayed any negative effects Brexit might have in the Philippine economy. Direct Philippine exposure to the UK economy is relatively small. Merchandise exports and imports between the UK and the Philippines account for only 0.9 percent and 0.5 percent of the total in 2010-15, respectively.
In terms of external debt, borrowings from EU countries made up only 8.8 percent of the country’s total external debt. The country’s debt stock remained largely denominated in US Dollar and Japanese Yen. The UK, however, accounted for around US$1.5 billion of total overseas Filipino workers remittances in 2015.