THE Philippines, which is already expected to be the fastest-growing economy in Southeast Asia this year, is receiving a windfall of benefits from Duterte’s recent state visit to China.
The President said the objective of his first visit to Beijing was to establish “an alliance of trade and commerce” with China. The results of his trip show that he achieved his objective, for the benefit of the Philippine economy and of Filipinos.
Chinese and Philippine officials, including private-sector representatives from both countries, signed agreements for $15 billion worth of investments in different projects in the Philippines, such as infrastructure, transportation, telecommunications, agriculture and tourism.
Trade Secretary Ramon M. Lopez estimates that the investment agreements will generate 2 million jobs over the next five years. These investment agreements, as well as future investments, will not only increase China’s investments in the Philippines, which amounted to only $32 million in 2015, but also boost the inflow of foreign direct investments (FDI) in the country.
Data from the Bangko Sentral ng Pilipinas (BSP) show that during the first seven months of 2016, the Philippines received net FDI inflows totalling $4.7 billion, up 79.1 percent. The investments came mainly from Germany, the United States, Singapore, Japan and Korea. China also extended a $15-billion credit line to support other projects by Philippine companies.
The improved relations between the two countries, as a result of President Duterte’s visit, will also boost Philippine exports.
In 2015 Philippine exports to China, which consisted mostly of electronic products and minerals, totalled $6 billion. The potential for larger exports is huge considering that China’s total imports in 2015 were about $2 trillion. China has also resumed giving permits to 27 Philippine companies to export fruits, including mangoes, to China.
Chinese President Xi Jinping also announced the lifting of travel advisories, which were issued in 2014, to allow Chinese citizens to travel to the Philippines. In addition, the Philippines and China have signed an agreement to implement a memorandum of understanding on tourism cooperation that was forged as early as 2002. The new agreement will encourage investments in tourism projects and increase travel between the two countries.
The Department of Tourism (DOT) expects these developments to help the Philippines achieve or exceed its target of 6 million foreign- tourist arrivals for this year.
In 2015 less than 500,000 Chinese visited the Philippines. During the first seven months of 2016, Chinese visitors already reached 422,801. The DOT is targeting a total of 632,947 Chinese tourists by end-2016.
As the results of his trip show, Duterte is doing the right thing about being close to China and Japan, and encouraging Filipino companies to tie up with their counterparts in the two countries.
This is expected to increase optimism among local businessmen, especially the Filipino-Chinese community. Strained relations between two countries naturally make their businessmen uncomfortable in investing or operating in either country. Thus, the improved ties between the Philippines and China will make the Filipino-Chinese, who are among the biggest players in Philippine industries, more comfortable in doing business.
Perhaps, more importantly, the results of his visit is a very strong statement that Duterte is not anti-business, which is the kind of leader we need to continue growing the economy and improving the lives of Filipinos.
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