American elections matter to the Philippines even if Filipinos do not vote for their President this November.
Currently, there is a tight contest between Vice President Kamala Harris and former President Donald Trump.
It is important to the Philippines because of the future American foreign policy on China expansionism, plus the perils in the South China Sea and the price of oil (which the Philippines imports 100 percent), shaken by the two-year-old Russia-Ukraine war, which will affect the prices of goods here.
Trump has always made known his "America First" policy and often disparages America's democratic allies and is chummy with some autocratic leaders like President Vladimir Putin of Russia.
The Philippines' main concern today is China. President Ferdinand Marcos Jr. has taken a 360-degree pivot from the unabashed pro-China stance of his predecessor. The flashpoint is the South China Sea where a total of $5 trillion (a dated figure) value of goods passes through annually -and therefore, whose unbridled control can make or unmake free global trade intercourse.
China has constructed man-made islands along the ocean, and Chinese vessels have rammed and fired water cannons at unarmed Philippine vessels through the years. No bullet has been fired yet, though, nor has any Filipino been killed.
The latter could trigger the calling for the Mutual Defense Treaty between the USA and the Philippines. Already, President Marcos had been invited twice to Washington, and US Vice-president Kamala Harris and State Secretary Anthony Blinken had visited the Philippines. The result has been the establishment of several EDCA sites in the country- virtual launching pads of American weaponry and the reiteration of "America's iron-clad commitment to the treaty" (words of President Joe Biden).
Lately, America has offered to escort Philippine ships sailing on the China Sea even as the Philippines contemplates bringing the recent intransigence of China to the United Nations, once again. An added risk to the Philippines is the proximity to Taiwan, which is in terse verbal combat with Mainland China.
One wonders what the Trump administration will do if it wins, given Trump's avowed policy of shedding off the "Robocop" image of the USA and has even disparaged allies of not spending enough for their own international combat protection. Will he leave the Philippines to China's tender mercies?
America considers China an economic "strategic competitor" and the latter has extended its Belt and Road diplomacy over 150 countries since 2013 to contest American dominance. Records from the BSP (Central Bank) showed that from 2015 to 2022 (Duterte's reign) China had the second-highest investment in the Philippines at $1.7 Billion, next only to Japan's $2.2 Billion.
Many Chinese billionaires have done joint ventures with Filipinos in various industries. The most controversial has been investments known as "flexible capital" which went mostly into POGO operations which have resulted in numerous scandalous criminal violations and have been banned by President Marcos by December 2024.
There is also a strong fear that local corruption has allowed thousands of illegal Chinese into the Philippine shores- posing some national security threat as abundantly shown in the recent expose of "fake" Bamban Tarlac Mayor Alice Guo Hwa Ping.
Donald Trump had avowed close ties with Putin, and it would be interesting to find out his stance in light of the emerging threatening Axis of Power comprised of Russia, China, and a slightly off-beat North Korean leader Kim Jong Un. All three have nuclear capabilities and two of them are geographically not far from the Philippines.
On the other hand, the Russia-Ukraine War had initially pushed oil prices to $130/ barrel at the onset but has since been reduced to near pre-war levels due to several factors. Trump's rhetoric that he will end the Ukraine war on day one of his presidency is part of his exaggerated propaganda as it totally ignores the neurosis engulfing Putin's ambition to rebuild the old Russia. No personal friendship between Vladimir and Donald can alter that.
It is good that the world has responded positively to the threat of Russia's oil supply curtailment to dictate the trajectory of world prices considering that Russia is the world's second-largest oil producer.
Thankfully, the world has learned to develop new business relationships with other oil-producing countries outside of Russia, pursued new renewable forms of energy (as substitutes), and crafted financial instruments to hedge against the vagaries of oil price and supply.
On the other hand, the other big thing is the doubling of the output of gas produced through "hydraulic fracturing" or fracking in the United States- a cheaper alternative to OPEC oil, making America the biggest exporter of such gas. It has been used to substitute for (dirty) coal in the USA as an energy base.
Trump has always been a "fracking" advocate and Harris, though initially cautious of fracking due to its anti-environment consequences is now veering towards its massive production in the USA. These many combined developments make it harder for Russia to use the Ukraine war as leverage for political ascendancy by using oil as a weapon.
One economic model, for instance, stated that fracking will reduce the long-term volatility of oil prices by at least 42 percent. That's a huge impact.
The bigger picture, however, is the global contest of whether the authoritarian mercantilist model propagated by Russia, China, or North Korea is superior to the democratic form of government. It is important that whoever the Americans choose in November will favor the free air of democratic choice over the chains of despotism and one-man rule.
It is an important issue as valuable as the economic ones.
(Bingo Dejaresco, a former banker, is a financial consultant, media practitioner, and author. He is a Life and Media member of Finex. His views here, however, are personal and do not necessarily reflect those of Finex. [email protected]).