PH prioritizing economic ties with East Asia

Katherine Visconti
The Philippines is hoping to link its economic fate more closely to China, Taiwan, Korea and Japan

MANILA, Philippines – Over the next 3 to 5 years, the Philippines will prioritize its economic relationship with 4 East Asian countries, which it hopes will be strong sources of investments, said Department of Trade and Industry (DTI) Undersecretary Adrian Cristobal Jr.

“Priority markets are in East Asia — Japan, Korea, China, and Taiwan,” said Cristobal at a mid-year economic briefing at the University of Asia and the Pacific on June 20. 

“Very quietly trade attachés are moving around there, there’s some promotional activities that you can’t do noisily, you have to do quietly and talk to companies,” he said.

He explained that the move represents a “shift” for the Philippines. “Our traditional market for goods and sources of investments has been the U.S.A., Europe and Japan. In that sense these (were) the traditional [sources] for the past 30 years,” he said.

The Philippines wants to form stronger partnerships with East Asian countries to grow specific industries, such as consumer electronics, automotive parts, semiconductor manufacturing, agribusiness and food manufacturing.

China is important

China and the Philippines may be in a standoff over their territorial dispute in the Scarborough Shoal but the DTI still considers China an important partner.

“We do have a strong investment interest in China, we have yet to feel the investments from China,” said Cristobal.

“We have a strategic agreement with China, a 5-year development plan. The Chinese felt that this was a good idea,” he said. Part of the plan is to double bilateral trade to $60 billion in 2016. He stressed that they wanted to see more money coming in from China saying, “Our investments in China right now are actually bigger than their investments in us right now.”

Cristobal said that there are no targets yet for the amount of investments the Philippines would like to bring in from the other priority countries. “At a minimum we want to maintain the projected targets to increase the invesments in the country by 10% as a whole each year but from each source we don’t have that,” he said.

Specific Plan

Cristobal explained that the priority countries had been choosen because they have complementary goods and mutually beneficial industries can be developed.

“We are already there but it will be more targeted and strategic [now]… we are identifying specific sectors,” he said.

He outlined the DTI’s strategies for each country:

1. Japan

– Migrate manufacturing activities, specifically consumer electronics and automotive replacement parts, to the Philippines.

– In the short term, try to focus on opportunities in shipbuilding and supplying printing machine parts from Canon, Brother and other companies.

2. Korea

– Entice heavy indsustry investments in Philippine automotive electronics that can utilizing technology from Korea.

– Build on the Philippines’ strengths as a shipping hub, particularly for floating production, storage and offloading vessels.

– Encourage expansion into the Philippines for steel and cable manufacturing, as well as food manufacturing.

3. Taiwan

– Bring in investments to manufacturing, including electronics, semiconductors, automotives and metals.

– Get the attention of top agribusiness investors and packaging companies.

– Pursue a business development and networking program with prospective investors in Kaoshiung and Taichung.

– Look for possible investors in the Aquino administration’s public-private partnership scheme.

4. China

– Encourage the migration of manufacturing activities, specifically for garments, to the Philippines.

– Establish a shipping corridor between Batangas City and Humen Port in Southern China.

– Increase investments in Philippine aquaculture, agribusiness and tourism infrastructure, like hotels and resorts.

“We aren’t limited to this, we just see opportunities in these sectors,” said Cristobal. He said the Philippines would continue to look to the United States, New Zealand and Australia to grow the business process outsourcing sector. The Middle East could be a source of investments in power and agribusiness, he said.

Cristobal said the Philippines is particularly interested in developing new relationships with Russia and Finland, calling them “developmental markets.” He pointed out that investments from those countries could grow even if they may be marginal now, citing only P5.51 million of approved investments from Finland between 2006 and 2010 and Russia’s only P14 million of projects registered with the government as of October 2011.

“These are markets [that are] big, emerging growing, and we’re not very familiar with them… but everyone knows the potential is there. So it is good to start exploring and penetrating now,” said the DTI undersecretary. – Rappler.com