Generally I’m not keen on writing about the same topic twice in a row in this column, but things have moved faster than I thought, and I imagine the anxiety and apprehension is solidifying into something more real with each passing day.
In the two weeks since my last column, US president Donald Trump has really set his sights on Greenland, threatening tariffs on countries that don’t like the idea of his country acquiring the island, and then citing everything from his failure to win the Nobel Peace Prize to losing control of a critical archipelago in the Indian Ocean as reasons for his hyperfixation. And then he does a bit of a turn-around and says that a “framework” allowing the US to acquire the island has been agreed upon, whatever that means.
Meanwhile, the US’ erstwhile allies across Europe and the Pacific Rim scramble to figure out a response that would somehow keep the current international order – or at least allow them to move forward while recognizing that things will never be the same, judging from the speech made by Canadian prime minister Mark Carney at the World Economic Forum in Davos. In it, he called for “middle powers” to get their acts together to ensure international law and institutions are upheld as superpowers essentially throw their weight around more brashly. On the other side, there’s Trump spruiking his “Board of Peace” proposal, which some now see as intended to bypass the United Nations.
Now, these events may seem so far away from the Philippines, but apart from the possible geopolitical ripple effects outlined in my last column – particularly on China and the disputed territories within the South China Sea – these movements can affect, if not determine, efforts that our own government is making to ensure our competitiveness in the global stage. It is worth remembering that while we in the private sector have a significant role to play in building supply chain stability and resilience, it is the government that fosters a healthy investment environment and invests in the necessary infrastructure and institutions that ensures the continued working of these supply chains. In some matters, we can completely do nothing.
Where does the Philippines lie amidst this transition (or unmasking, as some argue this is just making private imperial ambitions public)? The Marcos administration has worked hard to strengthen its economic relationship with the United States, especially after its predecessor, the Duterte administration, all but favored China in its pursuit of a supposedly “independent” foreign policy. The government will point to at least two wins: negotiations that led to Liberation Day tariffs that are lower than Trump initially announced; and the continuation of American investment in the Luzon Economic Corridor program, which includes a potentially game-changing rail link between Subic, Manila and Batangas ports, as well as Clark airport.
However, China remains one of our biggest trade partners, with roughly USD 34.5 billion worth of Chinese goods entering the country in 2024. Alongside the territorial dispute and the military provocations within our exclusive economic zone, there remains a strengthening of our trade ties, and businesses from both countries entering each other’s markets.
In addition, the Philippines has set its sights beyond its immediate neighborhood, inking trade agreements with South Korea and the United Arab Emirates, and mapping out similar agreements with other countries around the world, including the United States. We have also seen the Marcos administration strengthen political ties with Japan and Australia, to present a counterweight of sorts to China’s territorial ambitions.
These efforts do not amount to nothing, but it does feel like the pace of events around the world would be faster than our ability to respond. Fostering stronger ties does not happen in a snap, and building more competitive infrastructure definitely doesn’t. Within ASEAN we are continuing to fall behind in investments, not helped by high energy and logistics costs as well as governance concerns – something definitely highlighted by the never-ending controversy surrounding flood control projects, which we all know is just the tip of the iceberg.
With a possible global realignment in full swing, we should stick closer to our neighbors to keep domestic consumption going and to give exporters access to outside markets. That said, are we in the best position to take advantage of these shifts? Can we turn these roadblocks to opportunities? I cannot answer that, but I do know… the government has some catching up to do, before we can do our own catching up.
2026 Supply Chain Outlook: Join us on February 6 at the EDSA Shangri-la for our annual look ahead to the issues and opportunities facing the Philippine supply chain sector. We will once again have an economic briefing from REID Foundation’s Roni Balbieran, followed by a panel discussion with industry stakeholders. Register now at scmap.org/events/outlook.
Henrik Batallones is the marketing and communications director of SCMAP, and editor-in-chief of its official publication, Supply Chain Philippines. More information about SCMAP is available at scmap.org.
