6 Ways Brexit May Impact the Philippines

Elpidio V. Peria
26 June 2016


from : http://schoolreport.yeoutbox.com/?p=3793

These past few days since Friday in the Philippines, various news networks online and on cable have reported on the impact of Brexit, the term of art used to refer to the referendum in the UK on whether the UK will stay in the European Union (EU) or get out.

Last 23 June, the referendum was held and, contrary to what was expected by many, around 52% of UK citizens voted to leave the EU while 48% wanted to remain. UK Prime Minister David Cameron, who only wanted to silence his ultra-right backbenchers in his ruling Conservative Party, now said he will resign until his party can choose his successor, but Scotland, which voted to remain in the EU, now wants to have another referendum for its independence and Northern Ireland, politically a part of the UK, but geographically a part of Ireland, an EU member, does not want to face the prospect of putting up border controls with Ireland, thus it may also consider eventually, as what its Sinn Fein leaders have recently called for, to also be reunited with Ireland.

Thus, an unintended consequence of Brexit is the potential break-up of what is still now the “United” Kingdom.

Filipinos, either here in the Philippines or in the EU and the UK, will have to do a lot of figuring out in the coming weeks the repercussions of Brexit, though under EU rules, particularly article 50 of the Lisbon Treaty which deals with EU members severing its ties with the EU, there’s a 2-year timeframe within which the terms of the so-called “divorce” are ironed out. What happens then is that we will have a two year window of things remaining the same, thus, goods and people to and from the UK and EU will operate under existing rules, though in the medium and long-term beyond the two years, the full impact of Brexit will then play itself out. For now, here are the ways the Philippines may be affected by Brexit , though how severe or negligible they will be will depend in how things will unfold after that two year window :

1. Trade, investments and remittances

For now, most economists and analysts, see the impact on trade, investments and remittances flows to be minimal, the Philippine Daily Inquirer reported that exports to the United Kingdom accounted only for less than 1 percent of total shipments from January to April this year, amounting to $150 million out of total exports of $17.4 billion for the period while UK foreign direct investments (FDIs) for the four quarters ending first quarter of 2016 amounted to only P4.8 billion or 1.9 percent of total. In terms of remittances, overseas Filipino workers’ remittances from the UK amounted to $1.4 billion or about 5.6 percent of total money wired home by overseas workers in 2015. The economist consulted by the paper, Citi economist Jun Trinidad, however, said that unless UK job and income prospects worsen, Brexit will not affect much these remittance flows.

2. UK aid to Philippines

UK is a constant and generous aid-giver to the Philippines, though the country is not in the top 20 countries which are recipients of UK aid money. From the website of the UK’s Department for International Development, in 2014, the Philippines received a total of UK pound 55.9million of bilateral overseas development assistance and the most high-profile of such aid has been to the typhoon Yolanda victims . Depending on the policy and priorities that may be set by a new Prime Minister that will replace David Cameron, this aid figure may be reviewed in the coming years which will consider the political and economic environment of the UK in the aftermath of Brexit.

3. Scholarships and scientific collaboration between and among UK and EU academic and research institutions

We have not found figures on how many Filipinos go to the UK for advanced study but there are surely a lot of Filipinos going there and use it as a jump-off point to the EU, after all, according to a British Council education website, the UK invests heavily in international collaboration – between 10 and 20% of the UK’s total science budget (including social sciences and humanities) goes to international research collaboration. 40% of research council grants have an international component, and over 50% of UK PhD students are international students.

The UK is also a significant beneficiary of EU funds for its scientific research collaboration efforts. According to the technology website The Verge, from 2007 to 2013, the UK contributed an estimated €5.4 billion to EU research and development, according to the UK Office of National Statistics. During that time period, it received €8.8 billion in direct EU funding for research, development, and innovation, the Royal Society said in a report published this year. Also cited by The Verge is the way UK-based scientists are able to freely collaborate with scientists in Europe and examples of that collaboration where Filipinos may have a chance to participate if they qualify is the CERN (acronym for the French “Conseil Européen pour la Recherche Nucléaire”, or European Council for Nuclear Research, a provisional body founded in 1952 with the mandate of establishing a world-class fundamental physics research organization in Europe) or the Horizon 2020 EU innovation program.

4. EU as a political entity and will English as an official language in the EU remain?

The bigger political casualty of Brexit is the concept of the EU itself as a political entity. Brexit has only emboldened other ultra-right movements in France and the Netherlands to demand for their own referendum to also get out of the EU, this will naturally sap the efforts of the EU to project itself in the international stage as a strong and united political unit. One of these projections of EU unity in the international arena is the matter of free trade agreements that the EU is currently negotiating with several countries. Already, according to an Indian daily the Deccan Herald, India is planning to rework its Broad-based Trade and Investment Agreement (BTIA), whose negotiations with the EU started in June 2007 and is still not finished. CNN analysts opine that the Transantlantic Trade and Investment Treaty, the proposed free trade agreement between the EU and the US may just have to await further developments in Brussels, the EU capital and they consider it on hold for the moment. The proposed EU-Philippines Free Trade Agreement which the Philippines is eager to get into may just have to wait until the EU will get its act together. It will be foolhardy for the incoming DTI Secretary to start negotiations with a political and economic entity that will be subjected to a long period of uncertainty, for now.

An interesting conundrum now also presents itself, given that English has become the de facto official language of the EU, will English continue to have that kind of status? Euronews thinks the debate will only intensify in the coming days but pointed to the following facts :

– there are 24 official and working languages in the EU;
– It is said that 13% of EU citizens speak English as their native language and nearly 40% of EU citizens claim to have sufficient skills in English to have a conversation;
– English is the most commonly spoken foreign language in 19 out of 25 European Union countries;
– German and French are spoken by 14% of the European population, Russian and Spanish at 6% each, and Italian at 3%.;
– Scandinavian countries have a very high working knowledge of English.

5. Implementation of the Paris Agreement

The EU has played a key role in the adoption of the Paris Agreement last December 2015 and the UK, with its lawyers and scientists, either in the EU delegation or in the country UK delegation, helped a lot in shepherding the global deal into existence. The UK paper The Guardian however speculates that, with Brexit, there will be a delay in the ratification of the Paris Agreement in the EU side, giving the chance for climate-denying world leaders, for example, if Donald Trump of the US wins the November 2016 elections to derail the Agreement from coming into effect and the fellow has issued press statements he will do just that.

Things are not also certain within the UK itself, as most Brexiters favor a repeal of the UK’s own Climate Change Act which sets out long-term targets on greenhouse gases and five-yearly “carbon budgets” that governments must meet. The paper however noted that, the UK, on its own, may also ratify the Paris Agreement, the country accounting for less than 2% of global greenhouse gas emissions, but the signal sent by Brexit puts into doubt the kind of international collaboration needed to deal with climate change.

6. The great intangible : will the UK still be a welcoming country for dark or fair-skinned foreigners?

This is something that Filipinos planning to visit the UK will have to reckon for themselves and experience and see whether there is a noticeable change in attitude of the Brits to foreigners like us Filipinos. Reviewing the UK’s colorful history before it became an Empire, to the height of its imperial might with colonies stretching the far reaches of the globe in Africa and Asia, its finest hour under Winston Churchill in World War 2 where it became a bulwark against Hitler, and its subsequent decline and now gradual recovery from the time of Tony Blair to David Cameron, the UK, along with all modern developed countries, is struggling to find its voice and its role in this disorderly world beset by global terrorism, mass migration triggered by the Syrian civil war and other conflicts in the Middle East and intertwined economic and financial relationships among countries and corporations whose objectives are often not in sync, it remains to be seen whether those who voted leave have been clear from whom they have liberated the UK from.


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