Japan disaster seen to cut local exports, financial aid
MANILA -- The Philippines will have to brace for lower exports and lesser financial aid for infrastructure projects after last week’s massive earthquake and tsunami in Japan, an analyst said Friday.
“The disaster in Japan will be greatly felt by the Philippines, which failed to develop internal economic strength and is unduly reliant on foreign external factors. It is likely that Japanese investments and official development assistance to us will drop or at least slow as Japan tries to reconstruct itself,” Sonny Africa, research head of militant think-thank Ibon Foundation told Sun.Star.
Last year, Japan contributed 36 percent of the estimated $9.7 billion of foreign aid given to the Philippines as President Benigno Aquino III even announced some $2.85 billion worth of Japanese investment pledges in power, transport, and infrastructure.
Philippine exports to the world’s third largest economy might also suffer, affecting local companies involved in manufacturing construction equipment, auto components, and food.
These sub-sectors comprise the bulk of an estimated $7.8 billion worth of Filipino products and services imported by the Japanese in 2010. The figure represents 15 percent of the $52-billion export receipts last year.
Semi-government Export Development Council had targeted exports to grow by only 13 percent in the next three years due to threats to global economic recovery and an appreciating peso, which makes exports more expensive.
“All these will only be aggravated to the extent that the Japanese crisis disrupts the fragile supposed global recovery — shaken already by weak US economy and Middle East troubles,” Africa noted.
On the positive front, Labor Secretary Rosalinda Baldoz had said the Philippines will stand to gain from the latest calamity that hit Japan because of reconstruction efforts there.
Africa however saw the reverse, saying it remains uncertain how far the country will benefit from Japan’s plan to rebuild itself.
“The demand for overseas Filipino workers may drop as the Japanese economy struggles to recover,” he said.
Some 300,000 Filipinos in Japan sent home $883 million in 2010, nearly five percent of the $18.76 b illion total remittances that fuel consumption expenditure in the country.
REACTION PAPER
After reading the whole article I was not happy because the local exporting of goods to Japan will decrease because of the disaster that happen to Japan which failed to develop internal economic strength and is unduly reliant on foreign external factors. Last year Japan invested power, transport and infrastructure. To what just happen to Japan it would be really suffer the Philippines affecting those local companies involved in manufacturing construction equipment, auto components, and food. Good thing about is the labor secretary just said that the Philippines would stand to gain from the latest calamity because of the construction efforts. This would also affect those Filipino workers and lose their jobs but Japan would rebuild their country after all they are known as the richest country.
