PBBM’s China visit boosts trade, investment

President Ferdinand R. Marcos Jr.'s China visit from 3 to 6 January next year is a recognition that the world's second-largest economy is an important trading and investment partner, Trade and Industry Secretary Alfredo Pascual said.

"The President's visit to China will pave the way for further strengthening our trade and investment relations, particularly as we work to recover from the pandemic and position the Philippines as a regional hub for sustainable and innovative manufacturing and services industries," Pascual told reporters on Thursday night.

Aside from First Lady Liza Marcos, Pascual will be part of Marcos Jr.'s state visit to China, along with other key officials such as former President Gloria Macapagal Arroyo, House Speaker Martin Romualdez, Foreign Affairs Secretary Enrique Manalo, Finance Secretary Benjamin Diokno, Information and Communication Technology chief Ivan Uy, and other Cabinet Secretaries whose presence "may be needed to sign bilateral agreements with their Chinese counterparts."

Roundtable with Chinese firms

Pascual said the DTI has organized a series of roundtable meetings for the President during the state visit with major Chinese companies with existing and planned investments in the Philippines in the key sectors of complementation with China, specifically agribusiness, renewable energy, steel making, nickel ore processing and battery production, and electric vehicle manufacturing.

Chinese importers of tropical fruits from the Philippines, he added, will also participate in the meetings.

He said the China visit also aims to build on the export gains and further strengthen relations with key partners in China to help the Philippines realize its additional export potential.

"The sectors with the most considerable export potential to China include, among others, electronic equipment, electrical machinery, metals, optical products, watches, medical instruments, fruits, motor vehicle parts, processed or preserved food products, and fish and shellfish," Pascual told members of the media via Viber.

He added that the Chief Executive will be accompanied by a delegation composed of business executives from Philippine companies with existing and/or prospective business partnerships with Chinese enterprises. Such partnerships include investments and exports.

RCEP inclusion

Likewise, discussions with Chinese firm honchos will include the push for the Philippines to be included in the major trade bloc agreement Regional Comprehensive Economic Partnership, which Pascual and other cabinet members, as well as President Marcos Jr., have been pushing the Senate for their concurrence to be ratified early next year.

"With the eventual participation of the Philippines in RCEP, we see that it will boost the Philippines' strategic advantage for investments while providing more opportunities for our stakeholders to enjoy a more extensive free trade area," Pascual said.

The country's stakeholders, he said, can enjoy wider sourcing of raw materials from 14 countries, including China, and export processed products from the Philippines to the RCEP parties.

He said improved market access for certain Philippine products is secured in RCEP for the China market, such as preserved pineapples, pineapple juice, coconut juice, ignition wiring sets, and flexographic plates.

"RCEP will support the Philippines' goal of seeking a more robust and beneficial partnership with China. The long history of business relations between our two countries, the cooperation in the Belt and Road, and now RCEP will facilitate the further growth and deepening of our bilateral business relations," he said.

Attractive proposition

This, as the Philippines, holds an attractive proposition for business that is based on many vital factors, which include the country's large market of 107 million consumers and a resilient and growing economy; the availability of skilled, young people; a strategic resource for growing global businesses; and the Philippines' strategic and preferential access to other markets like the United States and European Union.

The country is pushing for reapplication for the EU Generalized Scheme of Preferences Plus, which has been benefiting the country since 1994 and helped in improving the country's socioeconomic development.

According to the European Commission, the trade in goods between the Philippines and the EU equaled €15.2 billion in 2021, while the bilateral trade in services between the nations reached €4.9 billion in 2019. It added that the EU is the largest foreign investor in the Philippines, with its direct investment stock of €14.4 billion in the same year.

The US-GSP+ was halted when it expired last December 2021, but the Trade Department has been eyeing to renew it as more meetings with the US government are underway next year.

"As Chinese companies pursue opportunities in RCEP, those looking to diversify their business locations to sustain and enhance regional competitiveness can consider the Philippines a complementary location. We can also be an alternative hub for their production and service facilities," Pascual said.

With RCEP participating countries also making significant commitments under the services trade, he said the Philippines sees this as another area for increased bilateral collaboration.

"As Chinese companies pursue "going out" strategies, we can partner while providing support through Philippine talent as a strategic resource. In particular, technological, soft and people skills will be critical in the services and digital industries," he said.

He added: "With this in mind, our country has an excellent track record in supporting the global operations of companies worldwide. Our workforce's strong customer service orientation also makes the Philippines an ideal location for services for getting in touch with customers globally."

Further improvement

Pascual said the government would like to see further improvement in its growing bilateral trade with the upcoming state visit.

In 2021, China was the Philippines' top trade partner, with a total value of $38.35 billion, and was also the country's 2nd largest export market ($11.55 billion) and a leading import source ($26.8 billion).

With current trade figures, Pascual said he hopes to achieve a more balanced level of trade through, among others, further market access to agricultural commodities.