While they predict a slowdown in the United Kingdom, the European Chamber of Commerce in the Philippines (ECCP) is confident the ‘Brexit’ will not affect remittances from Filipinos in the UK.
ECCP President Gaunter Taus told [email protected] on Tuesday that like immigration, remittances between UK and the Philippines may not be affected by the British decision to leave the European Union (EU).
“I don’t think there will be any issue with Filipinos in the UK and vice-versa... because the UK has never been part of the Schengen agreement anyway,” he said.
“So I don’t think it would impact foreign remittances. It might or might not impact...won’t affect the direct foreign investments out of the UK and the UK is a very important trade partner for the Philippines,” he said.
Some 52 percent of the British populace voted on Thursday that they leave the EU, and it was immediately followed by sharp economic tumbles for the country, including credit rating cuts.
Taus said there may have always been a possibility that the UK would leave the EU, but nobody expected it "because why would Great Britain go out of the EU? There's no reason for it."
"If you look at it realistically, the UK had special concessions being in EU—may it be not [being] part of Schengen visa, not part of the monetary union," he said.
According to Taus, the 'Brexit' will hurt the UK more than it will the EU, and he added, it may come in short, medium, and long-term effects.
In the short term, Brexit has resulted to market volatility. But on top of that, Taus underscored that the UK will have to renegotiate separate trade pacts with other nations as a lone country apart from the EU.
Britain may now be subject to regular import duties and taxes if they are no longer part of the free trade agreement (FTA) between the EU and the Philippines, which may come to fruition within the next two years, according to Taus.
"Take the car industry, take a lot of other industries. If they’re no longer part of the EU, what is going to happen? They’ll have higher import duties and whatnots. So, it would certainly hurt UK business," he said.
However, the EU may be feeling a bit sentimental about a member leaving the union because "it is [of] utmost importance to keep it together as a union," but Taus said it will survive the economic implications of UK's exit.
"For me, I look at it [as] what the UK cannot deliver, the rest of Europe can deliver. So it will directly benefit Europe in one way or another," he said.
Though the 'Brexit' may cause a “ripple effect” of other nations contemplating exiting the Union as well, Taus believes it "can be contained."
"But then again, you never know because there’s a number of countries that really want to get out of the EU," he added.