The Philippines and South Korea have agreed to further strengthen supply chain cooperation, according to Trade and Industry Undersecretary and Board of Investments (BOI) Managing Head Ceferino Rodolfo.

The two parties affirmed to prioritize supply chain and energy cooperation to further expand trade and investment during the Joint Commission on Trade and Economic Cooperation (JCTEC) held last month in Seoul. South Korea was represented by the Ministry of Trade, Industry and Energy (MOTIE) Deputy Minister Dae-jin Jeong.

On supply chain, Rodolfo said, both sides agreed to maximize areas for complementation in green metals and related industries such as electronic vehicles and semiconductors, focusing on building stable and sustainable supply chains for critical raw materials for production and manufacturing.

The BOI is positioning the Philippines as a key player in the supply of critical minerals given the country’s vast resources of green metals such as nickel, cobalt, and copper, inputs for the production and manufacture of electronic goods and batteries for electric vehicles.

“With Korea’s manufacturing capabilities especially in electronics, we hope to pursue a meaningful partnership in this area,” said Rodolfo.

Echoing the Philippines’ interest, Deputy Minister Jeong enjoined both countries to work together to pursue said endeavor.

“We will engage in technical discussions to pursue our strategic partnership through the proposed Memorandum of Understanding (MOU) on core raw materials and critical supply chains cooperation. The Philippines ranks tenth worldwide in terms of mineral production and is especially rich in nickel, chromium, and copper,” said Rodolfo.

On energy cooperation, Rodolfo said this is aligned with the need to respond to climate change challenges amidst ongoing global initiatives towards carbon neutrality, both sides committed to establish a cooperation-based mechanism on renewable energy, energy efficiency, and nuclear power.

On the expansion of trade and investment, the two nations acknowledged the continuing efforts of both sides in enhancing market access of key products, including the signing of the Philippines-Korea Free Trade Agreement (PH-KR FTA) targeted in 2023.

Activities to promote the utilization of the FTA through seminars and information sessions were also discussed. Further, in support of industrial initiatives, they agreed to maintain active engagement on ongoing Official Development Assistance (ODA) projects and to explore other areas for complementation such as collaboration related to the Philippines’ PUV modernization program.

Since the inaugural meeting for the planned bilateral FTA in 2019, Rodolfo said significant strides have been taken to deepen trade and investment relations and long-standing partnership. “We now have a free trade agreement on the horizon, which is yet another testament to our shared vision of achieving mutually beneficial outcomes for our countries,” Rodolfo said.

Further citing the Philippines as a valuable trade and strategic partner of South Korea, Deputy Minister Jeong underscored the JCTEC as a platform to review and discuss ongoing trade concerns and areas of interest for bilateral partnership.

“The Philippines is the first country in ASEAN to establish diplomatic relations with Korea, and through the JCTEC, we hope to strengthen cooperation and expand trade and investment ties,” the Korean minister said.

The meeting also highlighted the importance of regional mechanisms in building towards mutual economic gains, among which is the Indo-Pacific Economic Framework for Prosperity (IPEF). In September 2022, the Philippines and South Korea joined other IPEF partners in endorsing the statements for the four pillars on Trade, Supply Chains, Clean Economy, and Fair Economy.

First established in 2013, the JCTEC serves as the primary mechanism of both countries to pursue economic cooperation and trade and investment initiatives. The inaugural meeting of the JCTEC was held in June 2019 in Seoul, South Korea.

The Philippines views the JCTEC as a platform to better identify opportunities, coordinate and streamline activities of shared interest leading to targeted benefits and productive outcomes especially in trade and investments. Once the FTA is in place, the Philippines envisions that the comprehensive scope of its ECOTECH chapter will ensure that both sides will continue to benefit from complementation in priority sectors and areas, especially in manufacturing and infrastructure.

South Korea is the Philippines’ 5th largest trading partner, 8th largest export market and 3rd largest import supplier in 2021. In the same year, South Korea ranked 6th in terms of approved investments, with notable investment activities in construction, real estate, manufacturing, and accommodation and food service.