(Bloomberg) -- US President Donald Trump’s tariff plan may stoke inflation in the Philippines, an executive at the Southeast Asian nation’s top conglomerate said, as companies in the region brace for the impact of a potential trade war.

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“Secondary effects may go to the Philippines and those secondary effects may come across around exchange rate,” SM Investments Corp. Executive Vice President for Treasury, Finance and Planning Erwin Pato said in an interview with Bloomberg Television’s Haslinda Amin on Tuesday.

That means the peso may weaken and that “can be inflationary because we’re a net goods importer and of course the disruption of supply chains,” Pato said. Inflation pressures could affect purchasing power in the Philippines which is largely driven by consumption, he added.

The company, whose businesses include banking, retail and property development, last week reported its profit rose 7.3% to a record 82.6 billion pesos ($1.4 billion) last year, and SM is not worried about its investment in China amid the sluggish economic activity there.

“Our investment in China through our mall network is largely self-contained,” the executive said. “But our real focus really on the business of malls is in the Philippines because that is where the growth is.”

“And even with tariffs, we feel that the growth in the Philippines in the next years will really be driven by consumption,” he added.

--With assistance from Cliff Venzon and Anand Menon.

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