ESCALONA
The British vote to leave the European Union (EU), also called as the “Brexit,” will only affect the Philippines, including Cebu, if this British action will affect the US economy.
This was the general sentiment of Cebu Business leaders as they agreed with the assessment of Sergio Ortiz-Luis, Philippine Chamber of Commerce and Industry (PCCI) president, about the British exit from the EU.
The Cebu business leaders assured Cebuanos that the British move would not pose any direct threat to Cebuano traders.
Cebu Chamber of Commerce and Industry immediate past president Teresa Chan said there will probably be initial fears globally which will affect stock prices.
“But I believe everything will be back to previous ‘normal’ in no time. Effect on the Philippines as well as Cebu will be minimal. We will continue to transact business with UK (United Kingdom) and the remaining EU members individually,” she said.
CCCI president Melanie Ng agreed.
Ng said that what businessmen can do is to be vigilant and monitor the developments closely.
UK, EU recession
“Expect a temporary dislocation at the very least till the UK and EU adjust to the situation. So many people were shocked at the decision to leave that was fueled by misinformation and misperceptions. Unfortunately as in the UK, populist movements are rampant these days in too many countries,” said Cebu Business Club president Gordon Alan Joseph.
“These movements do not create stability and the history of the world is scattered with the bones of failed populist and nationalist governments and their victims,” Joseph said.
He added that the worse case scenario will be a recession in the UK and the EU.
“In fact there are opinions that a recession was imminent even before Brexit. Should this occur, this will impact the Philippines in terms of FDI (foreign direct investments) from the affected countries,” he said.
“We may see a strengthening of the peso versus these currencies which will make our exports less competitive to these countries. This will also be aggravated by falling demand for our exports,” Joseph said.
Eric Ng Mendoza, Mandaue Chamber of Commerce and Industry president emeritus, for his part, said he believes there will be minimal impact on the Philippines including Cebu.
“Maybe when the US will be affected then maybe we can feel an impact but still (it will be) minimal. As you can see stocks in the US has started to react negatively, but I think that will be temporary,” said Ng.
Effect on PH exports
However, Fred Escalona, Philippine Exporters Confederation Inc. (Philexport) Cebu Chapter executive director, said that the effects on Philippines exports to a non-EU Britain would mean that British buyers or importers would not be able to enjoy EU perks such as the GSP+ wherein 6,724 Philippine products may enter the EU duty free.
“So I see that the negative effects of Brexit will be borne more by British consumers. Trade with the EU, whether we are exporting from the Philippines or exporting as part of Asean will continue to prosper,” he said.
Escalona said that he personally do not think our exporters need to worry about anything.
“It will be the British economy that would suffer in the long term by exiting the EU rather than the rest of the EU states and countries they trade with,” he said.
Escalona said that the country’s top exports to the UK include costume and fine jewelry, holiday decor, houseware, garments, furniture, seaweed, footware and leather goods.