Fiscal authorities in Asia and worldwide are acting with extreme caution following the UK’s closely-split and deeply controversial vote to leave the European Union. Financial markets are crashing, particularly in the West, and many nations and businesses are working hard to retrench the global economy. Even the big guns like China are looking worried. Filipino authorities, however, are confident that the Philippines have nothing to fear from the economic repercussions of ‘Brexit’.
Interesting Times
Britain’s vote to leave the EU has caused shockwaves across the world, with some commentators claiming that we could be witnessing ‘the fall of the West’. While this may not appear to be an issue of immediate concern for us here in the Philippines, the financial repercussions of Britain’s sudden, unexpected, and bizarre move could be far-reaching. The whole world is watching with caution, and even China is hedging her bets in the wake of these events. The central issue for nations not directly affected by ‘Brexit’ is that of volatility. It is naive to think that economic upheavals in one part of the world will not affect the rest of the world – to the contrary, this kind of thing reverberates throughout the global trade economy. ‘Brexit’ has caused an awful lot of uncertainty, and several swift sea-changes in market norms. This has created an intensely volatile situation which is making many countries pull in their economic antennae and pull themselves back until a clearer picture emerges and some semblance of stability is restored. Markets hate uncertainty, and they loathe volatility. Britain’s shocking referendum result is likely to have international trade implications with far-reaching consequences…only nobody knows what they are yet. This creates a deeply troubling economic climate, and this is why economic experts worldwide are eyeing Britain and Europe anxiously. Experts, however, are reasonably certain that the Philippines have nothing to fear.
‘Little To No Effect’
Across Asia, nations are dipping cautiously into their reserves in order to shore up economies against ‘Brexit’ recession-waves. However, Frederic Neuman, an HSBC expert in Asian monetary research has stated that he sees no need for monetary easing in the Philippines just yet. While businesses are advised to cover themselves against losses as a precaution, it is thought that the Philippines should be able to use their excess liquidity to ensure continued stability at this time. What is more, HSBC sees no cause for concern regarding remittances from the UK. While Filipino people may find it harder to gain access to the UK for jobs etc following Britain’s widely-predicted crash into the economic doldrums, this effect should be offset by rising strength in the dollar and the Chinese market. Of course, much of this is ‘up in the air’ and remains to be seen, but early predictions are that ‘Brexit’ will mean little more than ‘business as usual’ for the majority of Filipino businesses.
Friends And Relatives In The UK
If you have friends, relatives, or business interests in the UK, you may well be concerned about the impact of this decision upon these things. Again, there is a lot of uncertainty here so nobody can say for sure what will occur. The mood in Britain at the moment is ugly – upset, and deeply, deeply divided over this issue. There have been reported incidents of aggression towards those of foreign extraction, brought on by far-right groups who believe that the ‘Brexit’ vote has mandated anti-immigration rhetoric. However, these are generally overwhelmingly drowned out by anti-racism demonstrations and messages of support for foreign workers in the UK. Some are worried that the right and the left wing of British politics are about to tear themselves to pieces, with the fallout from this potentially spilling out into on-street violence, but as yet there is no evidence of rioting or undue social disorder, despite the perilous political situation into which the nation has plunged. If you have business interests in Britain, you may well be heading for something of a boom, as plenty of British businesses will be eager to make foreign trade connections in the wake of troubling times for the pound. What is more, the plummeting value of the pound will make trading with Britain rather cheaper than it has been in recent years. All in all, Filipions in or trading with the UK would do well to keep a close eye on the political situation, but may find their economic options in this arena considerably improved rather than the reverse.
Article from Gemma Graham