From trade dependence to money from workers abroad, Philippine President Rodrigo Duterte can hardly afford to pick a fight with the U.S. given his country's ties to the world's largest economy.
Duterte made headlines this week for all the wrong reasons. In his debut on the international stage and just days before he was due to meet President Barack Obama at a regional summit in Laos, Duterte made offensive comments aimed at the U.S. leader that prompted Washington to cancel the meeting.
While Duterte made a swift apology and the two leaders met informally on Wednesday, investors and analysts are left wondering if there's been any long-term damage to relations between the U.S. and its former colony. Whatever the fallout, it's clear from the economic data that the U.S. is too important a partner for the Philippines to alienate just as the Southeast Asian nation sheds its reputation as the " Sick Man of Asia."
"The link between the two countries is quite sizable," said Gundy Cahyadi, an economist with DBS Group Holdings Ltd. in Singapore. "It's an important trading partner, but beyond that, there are multiple business ties of all sorts."
The Philippine economy has expanded more than 6 percent since the third quarter last year, fueled by a young and growing population that's helped to prop up domestic consumption as global growth wanes. The following charts show how U.S. trade and investment has helped to underpin that growth story.
Remittances and Filipinos Abroad
There were more than 10 million Filipinos living abroad in 2013, according to the most recent official data, and cash that they send home is a major source of foreign-currency earnings for the country.
The U.S. is by far the favored destination, attracting about 35 percent of all Filipinos living overseas.
Remittances amount to about 10 percent of Philippine's gross domestic product. Filipinos sent $25.8 billion in cash to their home country in 2015, with 31 percent of that coming from those living in the U.S., according to data from the central bank.
The U.S. is the Philippines's second-largest trade partner after China. Exports and imports between the two countries have increased 23 percent since 2010 to reach $18 billion last year. The Philippines runs a trade surplus with the U.S. and exports mainly electrical machinery and textiles to the country.
The U.S. was the fourth-largest foreign investor in the Philippines last year after the Netherlands, Japan and South Korea, according to data from Philippine Statistics Authority. Investment in the Philippines is being held back by restrictions that cap foreign ownership at 40 percent in many industries.
The local business process outsourcing industry -- such as call centers -- is dominated by U.S. companies, including JPMorgan Chase & Co., American Express Co. and Accenture Plc. With many global businesses looking to set up back-office operations in cheaper locations, the Philippines benefits because of a large supply of college educated and English-language workers.