No investment, tourism restrictions vs China

MANILA, Philippines — No restrictions will be imposed by the Philippines in terms of tourism and investments from China despite the ongoing tensions in the West Philippine Sea (WPS), according to the National Economic and Development Authority (NEDA).

“We have no intention of restricting investments or tourists from China to the Philippines. Everyone is welcome to the country for investments as investors, as tourists,” NEDA Secretary Arsenio Balisacan said during the East-West Center International Media Conference yesterday.

Despite recent clashes between Chinese and Filipino vessels in the WPS, Balisacan said “it’s in our interest to see peace and prosperity in our region.”

He said supply chain disruptions from geopolitical tensions or other shocks like climate change will have a direct or indirect effect on the country.

Should tensions between the Philippines and China further intensify, he said it will impact the country’s economic growth, but this will be hard to quantify.

He said where the country may be affected most would be in terms of trade.

“The area where we are most exposed to China is in trade… We are part of the global supply chain,” he said.

Special Assistant to the President on investment and economic affairs Frederick Go said Chinese firms remain interested to invest in the Philippines and are confident of the country’s growth story.

“I think they continue to do business in the Philippines. The private companies, the private corporations out of China continue to want to invest in the Philippines,” Go told The STAR after the Manila Overseas Press Club Investment Night in Makati last Tuesday.

“I think the companies who invest in the Philippines believe in the Philippine growth story. They believe in the attractiveness of the Philippines as an investment destination,” he added.

Go said “occasional occurrences” are part of life and would not change the view of businesses with long-term confidence in the country’s economic performance.

“There is always something happening but if you have a long-term confidence growth story, you will stick to that conviction. I believe investors should be rewarded... We are one of the fastest growing economies in the region and in the world,” Go added.

Asked during the MOPC Investment Night to react to the WPS row, Go said it is “business as usual as far as trade and business is concerned.”

“Our policy when it comes to the economic side is to welcome all investments. We welcome all investments from China, from Japan, from Korea, etc. As a matter of fact, the trade counselor of the Chinese embassy, Counselor Yang (Guoliang), was in our office last week, and we were discussing some potential investors,” he said.

Data from the Philippine Statistics Authority showed China was the fourth biggest market for Philippine exports in April, accounting for $702.02 million.

In terms of imports, China was the Philippines’ biggest source in April amounting to $3.15 billion.

In terms of foreign direct investments (FDI), he said the share from China is quite small at 0.9 percent in the last three years, falling from 4.4 percent during the period of 2015 to 2019.

While China’s share in FDI to the Philippines declined, Balisacan said this cannot be directly attributed to the geopolitical issue with China.

“It could be one of those indirectly. It’s hard to attribute that in the absence of more information,” he said.

When it comes to official development assistance (ODA), he said China’s share is also small at only five percent of the total.

“We have been diversifying our sources of ODA,” he said.

As for tourism, he said there has been a slowdown, but this is also seen in other countries due to China’s internal issues and slow economic growth.

He also said China’s share in total remittances to the Philippines is very small at below one percent.

While the country’s economy, which has been driven by domestic demand, remains one of the fastest growing economies in the region, he said the aim is to strengthen other pillars of growth like investment and exports.

“When you can get your exports also to grow robustly as what our neighbors have done, of course, that will even elevate further our economic growth,” he said.

If the global economy is better and trade restrictions are reduced, he said the country’s economic growth will be even faster.

US to China: Stop harassing Philippine vessels

The United States called on China yesterday to end harassment of Philippine vessels and interference in the WPS.

US Ambassador MaryKay Carlson said the “chorus against threats to peace and stability in the South China Sea is growing louder and stronger each day.”

“When the United States sees our partners being bullied in their backyard, we speak up. And we encourage others to speak up as well – and they are doing so,” Carlson said in her remarks at the East-West Center’s International Media Conference.

She noted that a “free and open Indo-Pacific” is a region free from coercion from other countries, open to trade and investment and governed by international law.

“With likeminded partners and all who support the rule of law, we urge the PRC (People’s Republic of China) to cease harassment of Philippine vessels lawfully operating in the Philippine exclusive economic zones; to halt its disruption to states’ sovereign rights to explore, utilize, conserve and manage natural resources in their territories and EEZs; and to end its interference with the freedoms of navigation and overflight of all states lawfully operating in the region,” she said.

When disputes arise, she said they should be resolved in accordance with international law. “We will continue to support the Philippines and other partners on these issues,” Carlson added.

Carlson said the Enhanced Defense Cooperation Agreement (EDCA), which operationalizes the US-Philippine alliance, is one of the cornerstones of the Mutual Defense Treaty of the US and the Philippines.

She noted that EDCA enables Filipino and American forces to more closely train together, modernize and respond to shared threats, including natural disasters, in nine mutually agreed locations.

EDCA projects across these locations represent an initial investment of about $100 million or P5 billion, funding the repair of runways and the construction of disaster response warehouses and command and control infrastructure.

“These infrastructure investments at EDCA locations also spur economic growth and opportunity in local communities,” she said. – Alexis Romero, Pia Lee-Brago