Philippines, China explore trade, infra prospects

MANILA, Philippines - Chinese Ambassador Zhao Jianhua recently paid a courtesy visit to Finance Secretary Carlos Dominguez during which the two officials “agreed to explore possible areas of interest” in infrastructure, power, tourism, technology and education, the Department of Finance (DOF) said yesterday.

Agency-specific projects were also discussed concerning the departments of Public Works and Highways, Transportation and Agriculture. No details were released for the first two agencies.

For the Agriculture department, however, export of Chinese-made agricultural equipment as well as “expansion” of Philippine food exports are being considered.

Trade cooperation was also tackled, particularly trade data gaps, as well as efforts to curb the entry of illegal drugs into the country.

According to government data, China was the country’s biggest source of imports in June, accounting for 18.8 percent or $1.29 billion of total purchases worth $6.85 billion.

China was also the fourth largest destination of Philippine exports in June, cornering 11.3 percent or $536.14 million of the $4.75 billion shipments.

But in terms of official development assistance (ODA), data from the National Economic and Development Authority showed a “concessional loan” and “preferential buyer’s credit loan” as of 2014 both for a period of 20 years.

The amount of assistance was not indicated, although the two financing needs carried two and three percent interest per year, respectively.

According to the DOF, Dominguez and Zhao also discussed “revisiting” China and the Philippines’ foreign currency swap agreements, which allow both nations to source foreign exchange needs in case of liquidity problems.

China has the world’s biggest foreign exchange reserves valued at $3.65 trillion as of July.

The Duterte administration has been open and more welcoming to bilateral talks with China, which the Philippines sued before the Permanent Court for Arbitration over its vast claims in the West Philippine Sea.

The court ruled in the Philippines’ favor, although it has not been forcefully implemented.

Under the DOF’s financing plan for next year, 80 percent or P102.26 billion of the P126.26-billion in gross foreign borrowings will be sourced through project and program loans or ODA.

This marked a change from the previous administration’s focus on commercial borrowings or through bond issuances for its funding needs.