Analysts have downplayed any negative impact on the economy from President Rodrigo Duterte’s latest tirade against the European Union (EU).
On Thursday, Duterte threatened to expel EU diplomats after claiming that they wanted to have the Philippines booted out of the United Nations. The Palace quickly moved to limit the fallout, saying the president had reacted to statements made by an international delegation that had warned the country could be kicked out of the UN Human Rights Council.
“If pursued, such move would disrupt our country’s trade transactions with the EU and drive foreign investors, especially those from Europe, away from the Philippines, resulting potentially in the slowdown of the country’s growth,” Land Bank of the Philippines market economist Guian Angelo Dumalagan said.
“However, I believe that the recent remark of the president is no different from his other controversial comments in the past that proved to be mere political noise,” he added.
Dumalagan also claimed that investors were still focusing on positive developments such as the government’s tax reforms and infrastructure plans.
IHS Markit Chief Economist Rajiv Biswas also said that bilateral relations would not be affected by the incident, “unless either the Philippines or EU announce some new measures.”
“The presidential palace has clarified that the president was responding to statements by a seven-person delegation from the International Delegates of the Progressive Alliance, which does not represent the EU, and the president had challenged the delegation to leave the country. EU officials have also clarified that the visiting delegation did not represent the EU,” Biswas said.
He noted, however, that the European Parliament earlier this year adopted a resolution calling on the EU to convince the Philippines to stop extrajudicial killings related to the anti-drug campaign.
The European Parliament indicated that it may consider removing the Philippines from the list of countries benefiting from the General System of Preferences Plus (GSP+) program if no progress was made on this matter, Biswas added.
“The Philippines benefits from duty free access for over 6,200 products into the EU market under the GSP+ system, and the EU is the third largest export market for the Philippines, accounting for 12.1 percent of total Philippines merchandise exports in 2016,” he said.