MANILA, Philippines – The Makati Business Club (MBC), which counts the country's largest conglomerates as members, supports President Rodrigo Duterte's new policy of opening up to China.
"Given China's stature as a major player in global affairs, and the Philippines' steady economic rise, both our countries stand to benefit from renewed and much closer ties, particularly in trade and investment," the MBC said.
The business group added that "China's expertise in infrastructure will be critical to the Philippines' development, as we seek to close the massive infrastructure gap that has been suppressing the country's growth for the past years."
The MBC noted that China has grown to become the Philippines' 2nd largest trading partner, accounting for $10.8 billion in imports and $6.4 billion in exports.
The Philippines has also invested $75 million in China as of 2012, while China has invested $570,000 as of 2015 – a figure that the MBC is confident will go up as the two countries "take [their] renewed relationship to the next level."
During Duterte's recent state visit to China, there were numerous agreements for Chinese firms' involvement in planned big-ticket infrastructure projects in the Philippines.
The Bangko Sentral ng Pilipinas (BSP) just this week also gave another indication of the country's growing economic relationship with the world's second largest economy as it added China's Renminbi to its basket of gross international reserves.
Maintaining ties with the US
The Duterte administration's warming up to China has come amid the President publicly distancing himself from the Philippines' main traditional ally, the United States. (READ: Duterte's tough talk and what it could mean for US, EU investments)
For the MBC, stronger ties with Beijing should not mean a weaker relationship with Washington.
"We believe that as we strengthen ties with one of our neighbors, this should be in tandem with continuing to nurture our partnership with existing strategic allies and friends. In particular, our relationship with the United States, particularly on the economic front, should remain solid and should also be further expanded," the business group said.
The MBC pointed out that the US stands as the Philippines' 3rd largest trading partner, accounting for 12.7% of total trade.
The business group added that two major pillars of the Philippine economy – overseas Filipino workers' remittances and the business process outsourcing (BPO) industry – are closely linked to the US.
Based on the MBC's research, Filipinos in the US contribute the highest amount of remittances, valued at $8.4 billion and accounting for 33% of total remittances sourced from all over the world.
American firms have also been crucial in the development of the Philippines' BPO industry, which has contributed $22 billion to the economy and provided 1.2 million jobs as of 2015.
The US, the MBC added, is among the country's major investors at $732 million in 2015, while Americans rank as the 2nd largest market for tourists, generating P4.4 billion in tourist receipts.
The business group also noted that the US donated more than $90 million and offered extensive manpower and technical support for recovery efforts in the aftermath of Super Typhoon Yolanda (Haiyan).
In terms of Official Development Assistance (ODA), 36.1% of the Philippines' grants come from the US. The United States' Millennium Challenge Corporation, the MBC cited in particular, has extended over $433 million worth of anti-poverty and human development programs in the Philippines since 2006.
Foreign policy direction
While the MBC expressed support for the Duterte administration's "independent" foreign policy, it also called for a national dialogue to determine just where the new policy is headed.
"As we transition through this recalibration in our foreign policy, we call on the government to initiate another multisectoral dialogue similar to when it drafted the 10-point socioeconomic agenda," the business group said.
The MBC's recommendation is that the government invite respected leaders, foreign policy experts, policymakers, businessmen, academicians, and the youth to a dialogue.
"It is important for the world to see that the government continues its inclusive engagement and welcomes investments that will generate jobs," the MBC said. – Rappler.com