SCUTTLEBUTT

Tame prices blunt Trump blitz

An easing inflation would be the counterbalance to the backlash of exports of minerals and electronics moderating due to legal battle on Trump’s Liberation Day tariffs.

Demand for many consumer goods will likely remain robust due to easing inflation in the local market, according to Chinabank Research.

A report indicated the outlook on the country’s major exports after the US Court of International Trade declared Trump’s tariffs illegal.

US President Donald Trump said the tariffs are part of his emergency economic plan aimed at boosting production of American firms and employment among American citizens.

The bank’s analysts said the legal pronouncement only heightens global economic uncertainties among businesses which could lead to slower global trade.

“We expect succeeding trade data to further reflect the impact of US President Trump’s sweeping levies on external demand. Adding to persisting uncertainties are the recent US court rulings on the legality of Trump’s tariffs,” they said in an analysis released last Friday.

Data from Bloomberg showed that the Philippines is one of the least susceptible countries to the impact of the ongoing US trade war compared to our ASEAN peers.

As seen in the chart below, listed companies in the Philippines had the lowest exposure to foreign revenues (13.2 percent) and ranked second after Indonesia in terms of US exports and FDI as a percentage of gross domestic product (GDP) of 3 percent and 1.9 percent, respectively).

The biggest risk would be the market’s reaction to a global slowdown and sensitivity to foreign equity flows, which are both largely sentiment-driven.

The Chinabank report indicated Philippine exports of electronic products contracted by 4.8 percent in April when US President Donald Trump announced his reciprocal tariffs on imports from numerous countries.

The slowdown was mainly driven by semiconductor exports, declining faster by 6.9 in April from 3.8 percent in March.