Exports boost Philippine economy
Shen Hongfang China Daily Updated: 2006-01-16 05:32
Economic exchanges between China and the Philippines have reached a peak within the framework of bilateral ties that have been mainly driven by China's commitments to the WTO upon accession in 2001. The facts show an open China not only does not harm the economy of the Philippines but also actually boosts it.
The total value of bilateral trade has increased greatly and trade surplus is on the side of the Philippines.
According to records from Chinese customs, the significant growth of exports from the Philippines to China from 2000 to 2002 helped expand trade turnover from US$3.365 billion in 2000 to US$5.259 billion in 2002, achieving an annual increase of 33 per cent. Total trade value for both sides increased even faster in 2003 and 2004, reaching US$9.4 billion and US$13.33 billion increases of 78 per cent and 42 per cent respectively.
The Philippines has enjoyed a favourable trade balance of US$1.175 billion in 2002, US$3.212 billion in 2003 and US$4.09 billion in 2004, a total reversal in the history of bilateral trade.
Chinese investment in the Philippines is small but expanding. According to records from China's Ministry of Commerce in October 2003, about 40 Chinese companies and corporations are investing in the Philippines through joint ventures with local counterparts. The total contracted amount reached US$39.60 million, US$16.41 million of which came from the Chinese.
Total China investment in the Philippines in 2000 and 2001 accounted for only 0.2 per cent of the Philippines' total foreign investment. In 2002, the percentage increased to 2 per cent. In 2003, major investors from China were in IT-enabled services, hotel and commercial complex operation, energy generation, transport equipment and exports of silicon crystals and micro silica.
During her official visit to China from September 1 to 3, 2004, President Gloria Macapagal-Arroyo witnessed some of the trade agreements to be signed between Filipino and Chinese businessmen.
Among them was the memorandum of understanding between Philippine Coco Technologies and China Guangzhou Rivers Enterprise. A supply contract of baled coco fibre products was also signed between Philippine Environmentech Products and Guangzhou Tiahe Yi Xin Fibre Product.
Chinese data show there have been rapid increases in investment in China from the Philippines, contracted or utilized, since 2002.
In 2004, the contracted investment from the Philippines reached US$684 million, more than double the figure in 2002. The utilized investment from Filipino merchants reached US$233 million, an increase of 25 per cent over the year 2002. They have so far enjoyed good returns on their investments in China.
Other forms of economic co-operation inspired by China's WTO entry include contracted projects and labour co-operation, financial co-operation and tourism.
According to official Chinese sources, up to the year 2000 China had completed more than 400 construction projects in the Philippines. This momentum has been maintained since China's accession to the WTO.
In 2001, 37 joint construction projects with a total value of US$74 million were completed, and another 33 construction agreements were signed in 2002 with a total value of US$184.7 million. From January to May 2003, 10 contracts were signed with a total value of US$45.2 million, while turnover was US$31.8 million in the period.
With the expansion of financial co-operation, the two countries' importers and exporters have been able to settle commercial transactions without transiting through the banks.
In order to attract more Chinese tourists to the Philippines, the Department of Tourism opened a tourism office within the Philippines embassy in Beijing in July 2004. The office is aiming to raise the number of Chinese tourists to more than 60,000 a 100 per cent growth in the near future.
(China Daily 01/16/2006 page4)