China dependence leaves Phl firms exposed

Philippine manufacturers, exporters and retailers risk higher costs and supply disruptions as tensions with China escalate, exposing local industries’ heavy dependence on Chinese imports.

In a joint statement, 24 business, labor and industry organizations warned that worsening ties between Manila and Beijing could threaten trade, investment and jobs, urging both governments to ease tensions and restore diplomatic engagement.

Strained relations undermine investor confidence

The groups warned that strained relations could undermine investor confidence, disrupt supply chains and affect access to essential industrial materials and technologies.

“China supplies essential goods, industrial inputs, machinery, electronics, strategic raw materials, and renewable-energy technologies that support businesses, employment, consumers, and the clean-energy transition,” the joint statement read.

Signatories to the statement included the Philippine Chamber of Commerce and Industry, Employers Confederation of the Philippines, Philippine Exporters Confederation Inc., Federation of Philippine Industries, Federation of Filipino-Chinese Chambers of Commerce and Industry Inc. and Semiconductor and Electronics Industries in the Philippines Inc.

Citing Philippine Statistics Authority data, the groups said China and Hong Kong account for nearly 30 percent of the country’s international trade in recent years, including 26.3 percent of exports and between 27 percent and 29.5 percent of imports.

In contrast, the Philippines accounts for only 0.3 percent to 0.5 percent of China’s global trade, highlighting the country’s greater economic exposure to potential disruptions.

Stable economic relations

The groups said stable economic relations are particularly important for manufacturing, construction, agriculture, retail, energy, and renewable-energy industries that depend on Chinese supplies and equipment.

“Whatever our political differences or maritime disputes, constructive diplomacy and stable economic relations are essential to protecting livelihoods, maintaining investor confidence, controlling costs, accelerating clean-energy adoption, and sustaining development,” the joint statement said.

The appeal follows heightened exchanges between the Chinese Embassy in Manila and Philippine government officials.

Avoid inflammatory public exchanges

The organizations urged the government to avoid inflammatory public exchanges and pursue a consistent foreign policy that protects Philippine sovereignty without sacrificing economic cooperation.

They also pushed for diversified trading partners, stronger domestic manufacturing, and alternative sources of critical supplies to reduce the country’s dependence on foreign markets.

The groups stressed that economic diversification should complement, rather than replace, constructive engagement with China.

“Constructive relations with China do not require abandoning Philippine sovereignty, overlooking legitimate concerns, or compromising an independent foreign policy,” the joint statement said.

Ease tension, prioritize trade

They called on Philippine and Chinese authorities to ease tensions and prioritize trade, investment, technology transfer, and job creation, warning that unnecessary diplomatic friction could undermine the country’s long-term economic interests.