22-6-2024 (MANILA) The Philippines’ economic planning chief has reiterated the country’s openness to investment and trade with “any country, including China,” despite the growing tensions between the two nations over territorial disputes in the South China Sea.
During a media roundtable in Tokyo on Thursday, Arsenio Balisacan, the Secretary of the National Economic and Development Authority (NEDA), emphasized that the Philippines does not impose unnecessary barriers to trade and investment with any country, including China.
“Our position is that we do not impose unnecessary barriers to trade and investment to any country, including China,” Balisacan said. “The country needs to get investments and export for the sake of economic growth.”
China remains the Philippines’ top trading partner, with a combined $41 billion in exports and imports in 2023, followed by Japan at $21 billion and the United States at $20 billion.
Data from the Philippine Statistics Authority shows that the country’s exports to China, including Hong Kong, reached $6.3 billion in the first four months of this year, accounting for 26% of the total exports. Similarly, imports from China and Hong Kong made up 27% of the total imports.
However, the two countries are currently embroiled in a tense confrontation over disputed territory in the South China Sea. On Monday, the Philippines announced that Chinese vessels had engaged in “dangerous maneuvers, including ramming and towing,” near the Second Thomas Shoal, locally known as Ayungin Shoal, in the Spratly Islands.
“We strongly condemn the illegal, aggressive and reckless actions” of China, the statement said.
Despite the territorial tensions that have significantly escalated since 2023, a year after President Ferdinand Marcos Jr. took office, the close economic relationship between the two countries has remained unaffected. The share of Philippine exports to China and Hong Kong together remained around 27% in both 2022 and 2023. Additionally, net foreign direct investment (FDI) from China rose slightly by 2% to $15.99 million in 2023 compared to the previous year.
Balisacan expressed his hope to “separate economy from politics” in order to maintain the economic ties with China.
Meanwhile, Finance Secretary Ralph Recto, who was also present at the media roundtable, stressed the need for closer economic ties with Japan. Japan is already one of the Philippines’ top trading partners and was the top net provider of FDI and official development assistance (ODA) to the Philippines in 2023, with $849 million and $12.27 billion, respectively.
“We need more ODA from Japan to develop our economy and our economic security,” Recto added.
Japan’s ODA also contributes to Manila’s maritime security capability, with the Philippine Coast Guard acquiring two Japanese-made 97-meter multirole response vessels in 2022. Earlier this month, the two sides agreed on an ODA loan from Japan of up to around 64 billion yen ($400 million) for Manila to procure five more such vessels.
