The West Philippine Sea (WPS) issue will continue to hound the next administration, but economic relations between the Philippines and China will likewise be sustained regardless of whoever will become the next president of the country, according to an economist.
At the virtual Wednesday Roundtable @ Lido on the topic “Business with Neighbors COVID-19”, Jeffrey T. Ng, president of the UP School of Economics Alumni Association, categorically said that the Philippines will continue to do business with China.
“Economic relations with China will continue who is the president,” said Ng.
The current administration of President Duterte has maintained cozy relations with China. Duterte even set aside the arbitral award, a 2016 ruling by the Permanent Court of Arbitration (PCA) that favored the Philippines’ over China’s claims in the WPS, as the former Davao City mayor courts Chinese investments.
“The issue of WPS will be there in the next administration so we should be taking diplomatic dialogue with China through the international system or courts, but the Philippines will continue to do a lot of trade with China because it grows a lot faster than the US, because it is our number one trading partner and is growing two or three its size and will continue to grow whoever is the president,” Ng added.
Ng, who is also vice-president of the Federation of Filipino Chinese Chamber of Commerce and Industry (FFCCCII), said that with the Philippines’ huge natural resources, there is big potential for exports to China of minerals not just raw materials, but finished products steel products, copper, and aluminum.
Ng cited the agreements signed by Chinese firms to invest in the integrated steel project in Iligan.
Hopefully, he said, if these projects are implemented in the next couple of years so they can manufacture steel products, such as billets, rebars, among others for export to China and to other countries, similar to what South Korea is doing.
There are also Chinese investments in garments, telecoms and smaller labor intensive companies, he added.
In the same forum, George Siy, FFCCCII chairman for trade and industry, said the government is trying to do something to attract more Chinese manufacturers to invest in the Philippines and offers tax incentives but it just so happened that it is more convenient to enter into other countries than the Philippines.
According to Siy, one steel mill under the Panhua group is still awaiting the approval for its $3.5 billion integrated steel project in northern Mindanao, while another $3.5 billion steel project is under discussion, but has not been publicized because of negative media.
Siy vouched for the sincerity of the Panhua investor stressing the company had already spent $10 million initially, but the quarantine protocols in the Philippines have further delayed project implementation.
Many Chinese companies are also looking for local partners that are compatible with their goals. He cited potential investments in the tourism sector.
Ng said that with the passage of the CREATE law, foreign investors can now expect continuity in incentives. “Expect more Chinese firms to start looking at the Philippines seriously. Especially when we achieve the herd immunity next year, we expect Chinese investors knocking on our doors,” he said.