Trump 2.0 threatens Philippine BPO, economy: Nomura

MANILA, PHILIPPINES — The possibility of a second Trump presidency in the United States is raising alarms in the Philippines, especially in the business process outsourcing (BPO) sector.
Japanese investment bank Nomura highlighted the country’s vulnerability due to potential protectionist policies that could affect remittances, exports, and the BPO industry.
Remittances and BPO revenues at risk
Nomura forecasts that if Donald Trump returns to the White House, the Philippine economy could see a growth reduction of 0.2 percentage points from the expected 6.1%. A significant concern is the potential tightening of U.S. immigration policies, which could negatively impact remittances from the Filipino diaspora.
Remittances are crucial, comprising 8.5% of the country’s GDP and playing a vital role in poverty alleviation and economic stability.
“Trump 2.0 could leave the Philippines vulnerable through various channels,” Nomura stated.
While Trump has not explicitly declared plans to “bring back jobs to America,” the risk of such policies threatens BPO revenues, a key dollar source for the Philippine economy.
The BPO sector, which employs over 1.2 million Filipinos and generates more than $20 billion annually, could face challenges if U.S. firms are incentivized to repatriate jobs.
Trade and geopolitical concerns
Trump’s proposed tariffs could further strain the Philippine economy by reducing demand for Filipino-made products in the US, a major trading partner. Singapore shares this concern, as both countries are considered most exposed to Trump policies.
“Singapore and the Philippines are most exposed to Trump policies while Malaysia could gain some indirect benefits,” Nomura reported.
Nomura also warned of potential geopolitical tensions in the South China Sea. A reduction in U.S. military presence under Trump could embolden China’s assertiveness in the disputed waters, increasing the risk of confrontation.
Future outlook and industry resilience
Despite these challenges, the Philippine BPO industry is poised for growth and is driven by digitalization and automation trends.
The government’s initiatives, such as tax incentives and infrastructure improvements, continue to attract foreign investments. Emerging technologies like artificial intelligence (AI) and robotic process automation are revolutionizing BPO services, enhancing efficiency, and creating new capabilities.
In summary, while a Trump 2.0 presidency poses significant risks to the Philippine economy, particularly in the BPO sector, ongoing technological advancements and government support may help mitigate some of these challenges.
As the U.S. election approaches, the geopolitical landscape remains uncertain, with potential implications for the Philippines and the broader Southeast Asian region.