US commits more economic assistance to PH

Published April 16, 2021, 3:18 PM

by Bernie Cahiles-Magkilat & Chino Leyco

75 YEARS OF PH-US RELATIONS

The US government has committed to continue extending economic assistance to the its ally the Philippines in the form of grants for infrastructure projects, investment insurance coverage, technical and sustainability assistance  as both countries marked their 75 years of diplomatic relations. 

At the “PH-US at 75: Strengthening Ties through Sustainable Recovery | A Virtual Economic Briefing” organized by the Philippine Embassy in Washington, Ambassador Jose Manuel Romualdez cited strong economic ties between the two allies. 

US and Philippine flags (US Embassy in the Philippines / FILE PHOTO / MANILA BULLETIN)

He expressed hope for greater cooperation between the two countries in the areas of energy, healthcare, ICT, telco an manufacturing towards a sustainable future. 

The United States Agency for International Development (USAID) has committed additional funds to the Philippines’ vaccine program as President Duterte’s chief economic manger supported an appeal to nations with excess vaccine supplies to release them as soon as possible. 

Speaking before senior executives of American and Philippine companies on Wednesday, April 15, Gloria Steele, USAID acting administrator said the US development agency will provide additional $3.5 million to support the country’s delivery of COVID-19 vaccines.

This fresh funding from USAID is expected to help the Philippines in strengthening its vaccine supply chain, monitoring vaccine safety, and delivering effective communication campaigns to address vaccine hesitancy.  

The new US aid is also seen to assist local government units as they plan for, track, and administer vaccines.

“Our assistance will strengthen vaccine supply chains and support local governments to plan, track, and deliver vaccines, and it will help the Philippines Department of Health and local governments, distribute essential public health messaging around the vaccines,” Steele said.

Washington recently committed $4 billion to the COVAX facility where Philippines is expected to get vaccines that are enough to immunize at least 20 percent of Filipinos by the end of the year.

Since the start of the pandemic in 2020, USAID has so far committed a total of $25 million, or approximately P1.25 billion, to the health sector, Steele said.

Meanwhile, Finance Secretary Carlos G. Dominguez III said the Philippines is strongly supporting World Bank President David Malpass appeal to countries with excess COVID-19 vaccines to immediately release them.

Over the past weeks, the government’s vaccination rollout has not been widespread and the nation also saw its worst coronavirus surge. The COVID-19 death rate is now roughly 14 people per hundred thousand of the population.

Despite the supply challenges, Dominguez said the government is fully rolling out its vaccination plan and maintains its target to inoculate at least 70 million Filipinos or 100 percent of adult population within the year.

“We have arranged for the delivery of more than 140 million doses of COVID-19 vaccines this year. About 15 percent will be delivered in the first half of this year and 85 percent in the second half,” Dominguez said.

The majority of the financing needed for the vaccination program was also been sourced through loans from the World Bank, the Asian Development Bank, and the Asian Infrastructure Investment Bank, the finance chief said.

PH not maximizing US trade benefits 

From the trade side, the US continued to afford the Philippines duty-free privilege for its exports to the US market. Unfortunately, the Philippines failed to maximize the US trade benefits.

Javiera Gallardo, Director for Southeast Asia program at the US Chamber of Commerce Country lead for the Philippines, pointed out that the Philippines has 19 percent tariff advantage than the Chinese goods, which are slapped with 25 percent retaliatory tariff by the US since 2018 under the Section 301 tariffs during the Trump administration.

“Our study found that the Philippines has an average tariff advantage of 19% over Chinese exports coming to the US,” said Gallardo. 

The study showed the Philippines also recorded significant increases of travel goods, computer accessories and power cord exports to the US since the imposition of the additional duties on Chinese exports to the US.  However, the data showed that the Philippines has yet to fully maximize the advantages brought by the section 301 tariffs. 

The Philippines has been urged to maximize the benefits from the Section 301 tariffs especially as the Biden administration has no indication of lifting these retaliatory tariffs anytime soon. 

US funding

Development Finance Corp. (DFC) COO David Marchick also urged the private sector businesses to tap their huge fund of $60 billion of investment capacity to invest, lend and provide insurance to private sector companies in developing countries. Currently, the US agency DFC has $33 portfolio of investments in 106 countries. 

Under its new and expanded mandate, Marchick DFC has the capacity to lend more, invest in equity and provide insurance to private sector companies involved in developing countries like the Philippines in priority areas of the Biden administration such as climate, health, gender equity, telecom and internet, and inclusive growth. 

He encouraged the Philippines to identify a list of projects that DFC can invest in. “So, if 

there are companies that are listening or watching on the web later, if you need expansion capital and if you need political risk insurance or funds looking to invest in Southeast Asia,  please knock on our door or talk to our embassy in Manila.”

DFC has significant amount of investment in Southeast Asia, but Marchick said “We want to do more in the Philippines and want partner with you to drive economic growth in the country and to strengthen partnership between the US and the Philippines.“

In particular, he cited DFC’s $190 million funding for a subsea cable to support telecommunications infrastructure in the country.

PH policies, incentives

Major US firms operating in the Philippines also affirmed their commitment to continue investing in the country. These include global beverage giant Coca-Cola, IBM Philippines and Flour International. From the Philippines businesses, PLDT, Jollibee, and Ayala Corp. also vowed continued to expand in the US market and cooperation with US businesses.

Luis Velasco III, senior vice president of Jollibee Foods North America, said the Philippines’ most famous global brand plans to open 37 new stores this year in the US and Canada. 

According to Velasco, what used to be a small ice cream parlor in 1975 has now over 1,400 stores in the Philippines. The group has grown to 17 brands with over 5,800 stores in 35 countries and aspire to be top five global fastfood brands globally. 

Aileen Judan-Jiao, president and country general manager of  IBM Philippines, said although the business sector welcomed the passage of the CREATE law, the services sector are also pushing for the passage of other pending support bills like the creative industries and digital innovation to promote increase adoption of digital innovation products. 

In addition, Judan-Jiao cited the need to pass the amendments to the Foreign Investments Act to bring in higher foreign equity investments and pave the way for technology transfer. Finally, she urged for reforms in education to ensure the country has the right sustainable pool of talents for the digitally driven world.

Philip Vaughn, Flour International executive director for government relations, cited the huge, talented and qualified manpower pool in the Philippines that enable them to grow the business. To further growth for US and Philippine businesses, he urged both governments to move forward and forge a bilateral free trade agreement to further encourage two way trade. 

Philippines plays a key role in its global business providing engineering support for its global projects.

 
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