BEIJING - Addressing the trade imbalance between the Philippines and China could be among the early benefits the country can get from improved ties with China and its participation in the Belt & Road initiative.
“Noong maganda yung relationship with China, we were looking at balanced trade numbers. When the relationship with China turned sour, naging cold ang relationship, nahirapan na tayo mag-export, but we were still importing because goods from China were really competitive,” explained Trade Secretary Ramon Lopez.
Latest available annual data show, China was the country’s 2nd largest trading partner in the first semester of 2016, at $9.816 billion (or 15% of total trade), tilted to the imports side. Export receipts from China stood at just $2.702 billion, while import receipts hit $7.114 billion, resulting in a $4 billion trade deficit.
"Trade gap in each country should be maintained, not lopsided. Kawawa naman yung laging deficit, hindi nakaka-meet ng forex reserves (targets),” Lopez said.
Last year, China lifted a Philippine fruit ban and committed to explore broader farm and fisheries imports and investments in the Philippines – seen widely as a ‘gift’ to President Duterte, who was then making his first state visit to China.
Tourism could also get a boost from improved relations with China and infrastructure support from the economic powerhouse, citing the stark difference between 500,000 Chinese tourist arrivals in the Philippines and the 10 million Chinese tourist arrivals Thailand saw last year.
Duterte’s Cabinet secretaries, however, agree that risks remain. Lopez cited the possible "unreadiness" of the Philippine labor force for the influx of investments, especially in the infrastructure space.
"Eto na ang mga requirements, wala pa tayo. Kaya ngayon palang, baliwala itong mga opportunities generated kung wala din (tayo) ma-supply. It’s a good kind of problem…. But we still need to prepare,” he said.
For incoming foreign affairs chief Senator Alan Peter Cayetano, armed conflicts could prevent much-needed investments from going to some of the country’s poorest regions, like the Autonomous Region in Muslim Mindanao.
“When there’s peace, maraming investors are papasok, masasama ang mga areas nila (sa investments). Kapag may conflict, putukan, away – hindi masasama yung area…," he said. "There are the ongoing peace talks, mag-agree sana na walang gagalaw ng mga projects, we will all protect it kasi makikinabang lahat.”