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Manila-London trade relations now worth $1 billion a year

The country’s trade relations with the United Kingdom is worth around $1 billion a year and has grown at a fast clip of 10 percent the past five years, a British Embassy official said on Tuesday.

In an interview, Lain Mansfield, embassy director for trade and investments, told the BusinessMirror that while trade generally originates from London at the moment, that should soon change as Philippine corporations have started to internationalize and have made hundreds of millions in US dollars worth of investments in the UK and elsewhere.

“We now have a more mature commercial dialogue with the Philippines. At the moment, far more British investments come to the Philippines than the other way around. [But], in five years time, that is going to change and our trade relations will have more parity, with goods and investments going both ways,” Mansfield said.

The UK, according to the embassy official, particularly encourages the entry of infrastructure builders into their $2.5-trillion economy which has a real need to upgrade its aging energy sector, for which some $160 billion worth of upgrades have been budgeted.

“Energy is an important sector. The UK energy infrastructure is quite old.

Over the next six years we need roughly $160 billion worth of investments to upgrade our energy infrastructure,” Mansfield said.

The UK has mapped a very large national infrastructure plan requiring the investment of more or less $500 billion over the next six years.

He would not discuss transactional details but said the Aboitiz Equity Ventures, which has since complained of ownership restrictions within the Electric Power Industry Reform Act and has, as a result, started looking outside the country’s boundaries for investment opportunities, expressed interest in the UK’s infrastructure-upgrade program.

The UK owns the lowest corporate-income tax among the 20 richest countries grouped as the G20, at only 20 percent versus 35 percent in the case of the Philippines.

London is ranked 7th in the world in terms of ease of doing business, Mansfield added.

But the Philippines has its own investment virtues as well, the $270-billion economy having substantially improved to 52nd in the world in terms of ease of doing business at present from 85th in 2010.

“Manila is one of the most improved countries in 2010 in terms of ease of doing business,” the embassy official said.

Roughly 25 percent to 30 percent of the UK’s exports land in Asia, a good part of which eventually end up in the Philippines, according to Mansfield.

The UK exports to the Philippines have also grown much the past several years, averaging 10 percent since 2010, Mansfield said.

The goods pertain mostly to aircraft manufactured by the Airbus consortium whose wing parts and engines are manufactured in the UK, a few luxury cars, fishery products, food and drinks and lots of financial services availed of by Philippine business entities.

Mansfield said the most exciting Philippine investment in the UK was made by businessman Andrew Tan, who invested more or less $700 million in a Scotch whisky facility, itself a very important sector of the UK economy.

He said the Scotch whiskey investment was the third largest ever undertaken by a Manila investor and “strategically places a Philippine company at the heart of one of the most important export sector” in the UK.

Mansfield said the UK has put out the word that it welcomes business from everybody and that Manila entrepreneurs are very much welcome to invest in any of the sectors the UK government has opened for the business-minded.

 

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