RP, China trade seen to expand

MANILA, Philippines - The Philippines is confident that trade with China will continue to increase and expand further, especially in investment relations and trade diversification, as well as business-to-business linkages.

This was the assessment made by the Philippine Embassy in Beijing after trade figures from the General Administration of Customs of China (GACC) showed that bilateral trade between the Philippines and China increased by 52.6 percent to $13.1 billion in the first half of 2010 over the same period last year. Total trade for the same period in 2009 was $8.6 billion.

“Our bilateral trade with China was affected by the global financial crisis last year, but we are happy to see that in the first six months of 2010, bilateral trade grew remarkably and is inching up to 2008 pre-economic crisis levels,” said Philippine Ambassador to Beijing Francisco Benedicto in his report to the Department of Foreign Affairs (DFA).

GACC statistics revealed that trade between the two countries during the first half of 2010 was in favor of the Philippines, as China’s exports to the Philippines was valued at $5.6 billion, while China’s imports from the Philippines was pegged at $7.5 billion.

According to Chinese statistics, bilateral trade reached $30.6 billion in 2007, achieving a target three years ahead of schedule.

In 2008, total trade was $28.6 billion, further decreasing in 2009 to $20.5 following the global economic downturn.

“Both countries could work together to further expand the scope of bilateral trade, including diversifying bilateral trade structure away from mechanical and electrical products (semi-conductors for the Philippines), which comprises more than 50 percent of trade between the two countries,” Benedicto said.

“Moreover, the high share of electronics in the bilateral trade renders the relationship vulnerable to economic downturns.  This was apparent in the significant reduction of the bilateral trade in 2008 and 2009, due to weak global demand,” he added.

According to him, the Philippines could sell more agricultural products, processed food and minerals to China, saying this sector comprise less than five percent of China’s imports from the Philippines.

“We encourage more trade, investment, and buying missions to the Philippines.  We are also encouraging Chinese companies to visit the Philippines to explore investment opportunities there and to increase interaction between the private sectors of both sides,” he said.

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

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