THE Makati Business Club (MBC) on Tuesday welcomed the Duterte administration’s push to revitalize the country’s relationship with China, citing the gains from closer trade and investment ties, but stressed that it could do so while strengthening its economic partnerships with traditional allies such as the United States.
“We support the drive for an independent foreign policy, particularly during this time when the Philippines has gained international respect, recognition and confidence over the past few years,” MBC said in a statement.
“Given China’s stature as a major player in global affairs, and the Philippines’ steady economic rise, both our countries stand to benefit from renewed and much closer ties, particularly in trade and investment,” it said.
It added, however: “As we strengthen ties with one of our neighbors, this should be in tandem with continuing to nurture our partnership with existing strategic allies and friends. In particular, our relationship with the United States, particularly on the economic front, should remain solid and should also be further expanded.”
In terms of net foreign direct investment, China has been lagging far behind the Philippines top foreign investors, putting in only $570,000 in 2015. The US, meanwhile, is among the Philippines’ top investors, registering $732 million that year.
The MBC expressed optimism Chinese trade and investment with the Philippines will improve: “We are confident of a further improvement of these figures as we take our renewed relationship to the next level.”
The business group also hopes infrastructure in the country will receive a big boost with the entry of Chinese investors. “China’s expertise in infrastructure will be critical to the Philippines’ development, as we seek to close the massive infrastructure gap that has been suppressing the country’s growth for the past years,” it said.
Close links with the US
But highlighting the importance of the country’s strategic relationship with the US, the business group pointed out that overseas Filipino remittances and the business process outsourcing industry – two major pillars of the Philippine economy – are closely linked with the United States. They said Filipinos in the US contribute the highest amount of remittances to the Philippines, valued at $8.4 billion, accounting for 33 percent of the country’s total remittances sourced from all over the world.
The US accounted for 12.7 percent of the Philippines’ total trade. The Philippines exported $9-billion worth of goods to the US, while the Philippines imported $7.47 billion, reflecting a trade surplus valued at $1.55 billion. (for what period is this?)
The MBC cited American companies for playing a crucial role in the development of the local BPO industry, contributing $22 billion to the economy and providing 1.2 million jobs in 2015. The US is also among the Philippines’ major investors, with $732 million in 2015, while Americans rank as the country’s second largest tourist market, generating P4.4 billion in tourist receipts. Moreover, solid people-to-people ties, shared history, and common values bind the two countries together, it added.
“We should also note that in time of need the United States has delivered $90.9-million worth of financial aid and has offered extensive manpower and technical support to our rescue and rehabilitation efforts in the aftermath of Super Typhoon Yolanda,” the MBC said.
Similarly, the United States makes up 36.1 percent of official development aid grants of the Philippines, in contrast to other countries with much smaller grants portfolio extended. The United States’ Millennium Challenge Corp., in particular, has extended more than $433 million worth of anti-poverty and human development programs in the Philippines since 2006. The MBC said these figures “reflect the invaluable commitment and steadfastness of the US in assisting growth of our people and our communities.”
“As we transition through this recalibration in our foreign policy, we call on the government to initiate another multisectoral dialogue similar to when it drafted the 10-point socio-economic agenda.
“We hope that the government will also invite the views of eminent leaders, foreign policy experts, policy makers, business, the academe and the youth. It is important for the world to see that the government continues its inclusive engagement and welcomes investments that will generate jobs,” the MBC said, adding it is prepared to participate in such discussion.