Philippines expects trade, investment from China to grow

After the four-day visit to China of a high-level Philippine economic delegation that started Tuesday, trade between the Philippines and China as well as the flow of direct Chinese investments into the country are expected to grow.


Public Works and Highways Secretary Rogelio Singson, a member of the delegation, said that during the visit, the Philippines sought Chinese investments in major infrastructure projects, such as airports, roads, ports and railways, worth 12 billion U.S.
dollars.


Singson said that of the 25 projects under the public-private partnership (PPP) program of the Aquino administration, ten will be offered to foreign investors this year.


During a gathering in Beijing, Trade and Industry Secretary Gregory Domingo also assured Chinese businessmen that the Philippine government would provide qualified Chinese investors with tax exemptions and other incentives.


According to Domingo, China invested nearly 100 million U.S. dollars in the Philippines last year but he added that this is only a small fraction of China's 59 billion U.S. dollars in overseas direct investment. "There is a lot of potential for Chinese investors in the Philippines," he said.


In April 2007, Chinese firm Zhong Xing Telecommunication Equipment Co., Ltd., or ZTE Corp signed a 329 million U.S. dollars contract with the government of former President Gloria Macapagal- Arroyo for the construction of a National Broadband Network (NBN).


Arroyo, however, scrapped the ZTE-NBN contract in October 2007 after alleged irregularities in the deal, involving some of her officials, were exposed in the Philippine Senate. The deal has never been revived.


But the ZTE-NBN scandal has not dented the strong ties between China and the Philippines and their trade relations continued to flourish.


Earlier, the Department of Trade and Industry (DTI) reported that Philippine exports have fully recovered in 2010 from the 2009 slump triggered by the world's worst financial crisis. Export growth last year was the highest recorded in 11 years.


According to the DTI, China was among the top destinations of the country's exports last year.


Data released by the National Statistics Office (NSO) showed that Philippine exports from January to December 2010 reached 51. 39 billion U.S. dollars, an increase of 33.69 percent from the previous year.


Combined markets of China and the Hong Kong Special Administrative Region accounted for about 19.52 percent of the Philippines' total exports. This was followed by Japan, 15.17 percent; and the United States, 14.70 percent.


Based on data from the DTI's Bureau of Export Trade Promotion, 60 percent of Philippine merchandise exports went to North and Southeast Asia over the past five years. Of these, 23 percent went to China and 20 percent to Japan and South Korea.


Top exports of the Philippines to China in 2010 were electrical machinery and equipment, mechanical appliances, ores, copper, minerals, plastics, and electronic goods.


China's top exports to the Philippines were electrical machinery and equipment, mechanical appliances, iron and steel, minerals, and clothing accessories.


Domingo said that the strong showing in 2010 of the country's merchandise exports exceeded everyone's expectations.


"The challenge now is to build on the strengths of the current export business in the next three years to level up our export performance and double up three years after by seizing opportunities for the country's agribusiness and resource-based products," Domingo said.


Philippine exports are also expected to further gain impetus after the launching early last year of the China-ASEAN Free Trade Area. The Philippines is a founding member of the Association of Southeast Asian Nations, which has now ten members.


The China-ASEAN Free Trade Area is the world's largest free trade zone, covering 1.9 billion people and boasting a production value of 6 trillion U.S. dollars and a trade volume of 4.5 trillion U.S. dollars.


As tariff and non-tariff barriers between China and ASEAN are gradually removed, and as trade in goods and services and investment markets opened to each another, China and ASEAN countries have experienced a continuous increase in mutual trade and direct investment.


Philippine Ambassador to Bejing Francisco Benedicto has earlier called on Philippine firms to sell more agricultural products, processed food and minerals to China, saying this sector comprises less than five percent of China's imports from the Philippines.


Benedicto also encouraged Chinese companies to visit the Philippines to explore investment opportunities and to increase interaction between the private sectors of both sides.
(Source:http://news.xinhuanet.com)