Credit analyst S&P Global Ratings sees no serious economic impact on the Philippines from China’s aggression in the West Philippine Sea as it said both countries continue to discuss the territorial conflict.

“We haven’t seen much spillover. I think the Chinese market remains a key export market for the Philippines,” YeeFam Phua, S&P director for sovereign and international public finance ratings, told the media on Wednesday in a webinar.

“On the other hand, the Chinese market is the largest import market for the Philippines, as well,” he added.

According to the Philippine Statistics Authority, China emerged as the third largest export market of the Philippines, with receipts worth $625 million in January.

Top supplier

However, China was the top supplier of goods to the Philippines amounting to $2.65 billion or 26 percent of all imports during this period.

Phua said the strong trade between the two countries will likely continue as their governments deploy non-violent measures.

Committed to dialogues

“Both sides have committed to have dialogues on their differences,” he said.

China claims nearly all of the West Philippine Sea, including areas under the Philippine exclusive economic zone covering 200 nautical miles off its coastline.

In 2016, the United Nations Permanent Court of Arbitration affirmed the Philippines has sovereignty over the maritime area based on the related international law called the United Nations Convention on the Law of the Sea.

Phua said the United States might continue to influence Chinese-Philippines relations whose long-term conditions remain under analysis by the global community.

“President Ferdinand Marcos Jr. pivoted back to a more traditional way of foreign relations. Under former president Duterte, he moved a bit away from the United States which is a traditional ally for the Philippines,” he said.

These statements came after China on 23 March heavily water-cannoned a Philippine vessel while on its way to the Ayungin shoal to bring supplies to Filipino soldiers on board the BRP Sierra Madre, the dilapidated warship that serves as a Philippine Navy outpost in the area.