It could be an indication of America’s long-term economic decline, or of the Philippines' growing economic strength. Or the rise of a multipolar world that is no longer dominated by just one superpower.
Whatever the reason, there is no avoiding the conclusion that the Philippine economy is no longer as dependent on the United States as it used to.
Take trade for example. In 1950, exports to the US accounted for almost three-fourths of the total value of the Philippines’ overseas shipments. (See infographic) Last year, despite rising export volume, that ratio is down to just 14.6 percent, making the US the country’s second biggest export market after Japan. In fact, if Hong Kong and the People’s Republic of China were counted as one country, the US would only be the Philippines’ third largest export market.
Again, as recently as the early 1980s, the US lent the Philippines more than a fifth of the country’s external debt. Last year, it was just 4.4 percent. Similarly, in the early 1970s, the US accounted for a little over 50 percent of foreign direct investments coming to the Philippines. Last year, the figure is less than 10 percent.
This is not to say that American economic presence in the Philippines is no longer significant. US companies and brands still dominate many consumer and business markets in the Philippines. While its share of the export market has dwindled, it still remains the biggest source or channel of overseas remittances as well as the top market of the country’s business process outsourcing (BPO) industry. Indeed, these two activities – remittances and BPOs -- constitute the major sources of the country’s foreign exchange earnings.
Given the excessive dependence of the Philippine economy on the US in the past decades, the recent decline may be considered a necessary correction as the country diversifies its economic relations with the rest of the world and other emerging powers such as China and Russia.
It may also be viewed as some sort of maturation of the economic relations between the US and Philippines towards one that is more equal. Unlike before when it was mostly large US companies that came to the Philippines to extract natural resources, tap its English-speaking workforce or sell to its vast market, Philippine companies and investors now are also expanding to the US. Jollibee Foods Corp., a treasured homegrown fast-food brand, is a prime example of this. According to its website, Jollibee now has 37 branches in the US spread over 10 states.
Amid America’s declining economic footprint in the Philippines and the entry of Philippine companies and brands in US markets, US-Philippine economic relations may indeed be evolving towards equality and maturity.
Pauline Macaraeg is Entrepreneur PH's data journalist