The Philippine Trade and Investment Centre in Beijing was invited to share important developments in the Philippines-China commercial relations and; second, Asia-Pacific regional cooperation with the Philippines as host of APEC 2015 championing the SME agenda, on the occasion of a Seminar hosted by China National Committee for Pacific Economic Cooperation (China PECC).
Philippines-China Commercial Relations In terms of trade, China is the Philippines' third largest export destination, taking in some 12% of our total exports in 2014. Per Chinese statistics, within ASEAN the Philippines ranked as the second fastest growing trading partner of China in 2014. Major items traded primarily come from mining, semiconductor and electronics, and related sectors at varying degrees of value-added content.
With regard to investments, historically, China’s investments in the Philippines have been in the area of mining and extractive industry. In the last two years, statistics suggest that Chinese investments in the Philippines have started to diversify particularly in manufacturing either for export or domestic market. This may be attributed to the recent inclusion of the Philippines as the newest recipient of EU GSP+, which now allows the export of over 6,200 tariff lines at zero percent.
As the only ASEAN member covered by the EU GSP+ scheme, it appears that Chinese enterprises facing technical challenges have begun to capitalise on the Philippines with its regained competitiveness as an outsourcing-manufacturing destination for many of its export products to maintain a strong foothold in the EU market.
This year and beyond, the free trade regime in goods will be complemented by increased liberalisation of investment rules and easing of services sector restrictions. These have opened opportunities in the ASEAN not only as a single, large, and growing market of more than 600 million but equally important, as a single, integrated competitive regional production base.
Commercial Counsellor Christine dela Cruz noted that more than government businesses will drive regional integration. dela Cruz encouraged businesses to take advantage of the scale of opportunities offered by a single market, as well as the wide and varied complementation networks of a regional supply chain, in ASEAN and also in Asia-Pacific.
China is and will continue to be a major economic partner. Both countries have complementary trade and investment interests to serve. I am positive about the growth potential of our bilateral economic and trade relations in the years ahead, and how a better Philippines-China economic relation could contribute to building a stronger Asia-Pacific region.
2015 APEC Agenda In last year's Leaders’ Meeting in Beijing, the leaders endorsed an extensive array of measures to build on APEC’s work on trade and investment liberalization and on facilitation and economic cooperation. The list of issues in every meeting reflects the breath of the interest that we share on the APEC region.
The policy direction of APEC 2015 is actually built upon last year’s priorities of China revolving around advancing regional economic integration, promoting innovative development, economic reform and growth, strengthening comprehensive connectivity, and infrastructure development. These priorities of China are reflected in our own priorities and desired outcomes for this year, which is built around the theme: “Building Inclusive Economies, Building a Better World”.
While the Philippines will continue to look at issues such as FTAAP [Free Trade Area of the Asia-Pacific], the Bali Package of the WTO, ITA […] the chairmanship of the Philippines this year, dela Cruz mentioned that the Philippines as this year’s host have placed special emphasis on the SME agenda.
Mainstreaming SMEs into global and regional production networks is one of the four priorities of the Philippines as host of APEC Year 2015. Commercial Counsellor dela Cruz says that there is a need to recognize that integrating SMEs into regional trade could significantly contribute to making growth more inclusive.
The SME Agenda From the Philippine perspective, the SME agenda is very critical actually not only to APEC, but to the forward movement of global trade in general because SMEs are one of the strongest voices now opposing global trade. That is because they hardly feel the benefits of global trade. Many of the SMEs see the influx of goods and services into their own markets but find it very cumbersome and difficult to take advantage of the free trade agreements because of the cumbersome rules and procedures.
SMEs, from our perspective, are two different kinds, actually there are many kinds, but the two main ones would be the SMEs that that are part of global value chains. And this has merited some discussion recently in many of the trade forums including in the ASEAN and the APEC. But there is also a more important part. Those are what we refer to in the Philippines as cottage industries. These are the smaller SMEs that may include some micro-enterprises. These are the small business people who have one, two, three, four, five-person type of operations. Some of them produce very good quality products mainly in processing. There are also in handicrafts. There is also an extent in furniture – in many of the production of smaller items. And these are the ones that we need the most. For the global SMEs, we would need a different intervention to help them out from the cottage industry SMEs. So, these are elements we keep that in mind as we move forward in developing some action plans that we will want to do to help out the SMEs.
The Philippines recognizes that micro, small and medium enterprises (MSMEs) are an important force in economic activity, growth, job creation, community resilience and innovation. We will complement APEC’s initiatives on promoting SMEs’ participation in global value chains with an agenda that will support micro and small enterprises as direct exporters.
In fact in the recently concluded Ministers Responsible for Trade Meeting, the Boracay Action Agenda to Globalize MSMEs has been endorsed. This is an action-oriented initiative that supports APEC’s on-going work to address the barriers faced by MSMEs in international trade. Through the Boracay Action Agenda to Globalize MSMEs, Trade Ministers agreed to facilitate micro and small enterprises’ access to regional and global markets. For this, Trade Ministers also identified priority areas for cooperation and action on trade facilitation, e-commerce, financing and institutional support, including for women-led MSMEs.
Support from Member Economies The Philippines welcomes the support of economies on initiatives that focus on trade facilitation for SMEs. It’s really market access that’s lacking for the most part. So we’d like to emphasize really the trade facilitation agenda for SMEs. This would involve upgrades in customs and also simplifying the rules of origin administration and establishment of institutional support systems for SMEs
The Philippines as Chair is counting on all economies to make APEC the “incubator” for active and dynamic SMEs and be enablers in providing SMEs wider access to opportunities for inclusive growth and their integration into the global value chain.
The promotion of trade and investment has provided a solid framework for growth and prosperity. Certainly, inequality and poverty are still present and remain the biggest challenges to our economies. But over the past 50 years, trade has proved to be a powerful engine of growth. Thus, we need to expand trade and investment and encourage economic dynamism to achieve strong, sustainable and inclusive growth. APEC has a particular responsibility in this regard being an important regional bloc and a major player in international trade.
As chair, the Philippines welcomes cooperation and support to strengthen APEC and to continue to promote it as a forum that provides practical, relevant, and results-oriented initiatives to fulfill our common goals of development, prosperity, and progress.
With SMEs accounting for 97% of firms in APEC, an integrated region necessarily requires SME participation.
It has been almost two decades since the Philippines last hosted the APEC. Commercial Counsellor dela Cruz sahred that the Philippines has come a long way since, and this is something that as host the economy hopes to display as it holds the various APEC meetings leading to the APEC Economic Leaders Meeting in November 2015.
Commercial Counsellor dela Cruz also thanked the organizers in closing, and said that the APEC, however, is not all about work and serious discussions. It is a great venue to build friendships and encourage camaraderie among individuals who play significant roles in their respective economies, similar to the friendly golf game that same day.
Finally, the Philippine Trade and Investment Center in Beijing encouraged participants of the seminar to take advantage of the Philippine hosting year to enjoy what its country has to offer. As host, the Philippines hopes to bring attendees to some of its splendid beaches and to show some magnificent vistas during the meetings. But more importantly, the Philippines hopes that everyone will bear witness to its greatest resource: the Filipino people, who are kind, hospitable, compassionate, and talented beyond measure.