Finance Secretary Carlos Dominguez 3rd said Association of Southeast Asian Nations (Asean) member-economies, including the Philippines, should pursue strategies that would promote inclusive growth to counter the negative effects of emerging protectionist polices and a possible trade war between the United States and China.
At the recently concluded 12th session of the Asean Finance Ministers Investors Seminar (AFMIS) held in Lapu-Lapu City, Dominguez said that along with other Asean member-economies, the Philippines views potential “inward-looking” policies and the possible trade war between economic powerhouses “with great concern.”
The impact on the Asean of a US-China trade war was discussed at the AFMIS open forum as Chinese President Xi Jinping and US President Donald Trump met face-to-face for the first time last week and wrapped up talks on a wide range of issues in Florida.
Asean, founded 50 years ago, groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
The AFMIS, which preceded the April 7 meetings held separately and jointly among Asean finance ministers and central bank governors, gathered the regional bloc’s finance chiefs and investors to discuss ways to further expand investment opportunities in the region amid global uncertainties.
In the forum, Dominguez said Asean should learn from the globalization experience, which “has been a great source of increasing wealth, [but]a very poor tool for spreading it.”
He also said Asean should prepare its workforce to adapt to changes brought about by “disruptive technology,” referring to innovations that form new markets and jobs but eventually displace existing ones, so that the region could “ride out the tide of change” while coping with the rising popularity of protectionism and other “inward-looking” trade policies.
“We must really focus ourselves on policies that make sure that the wealth that is created by globalization is shared by all,” he said.
Dominguez said the Asean could help fend off the adverse effects of these “inward-looking” policies by implementing measures to speed up regional integration and the sharing of resources among their economies.
“So I think the lesson for us there is we have to integrate our economies a little more. We have, as I mentioned, a 650-million market. We are lucky we have a young population, we have a population that is trainable, and many of us in Asean need infrastructure. So sharing of resources within us will help alleviate any problems of a trade war or a protectionist policy,” he said.
In the case of the Philippines, the DoF chief noted that the government is countering the adverse effects of globalization and inward-looking trade policies by investing heavily in infrastructure, education and health, as such investments create jobs and disperse the benefits of growth to the countryside.
Dominguez also said the Philippines is open to investments in anti-pollution and climate-resilient technologies.
He also said the DoF and the Bangko Sentral ng Pilipinas are implementing measures to improve the financial literacy of Filipinos so that the 80 percent of the country’s population that are currently “unbanked” can be encouraged to access, and take advantage of, the services offered by the banking and insurance sectors.
“And we are not only talking of banking but insurance as well. There are many methods…, particularly increasing the number of branches we have, making sure that people have access to microcredit and certainly moving towards even microinsurance,” he said.