PH needs to tap vast China market

THE Philippines should take a more active approach in further boosting exports to China, and in better utilizing opportunities to penetrate the massive Chinese market, according to an industry expert.

Dr. Ellen Palanca, the director of Confucius Institute at the Ateneo de Manila University, said in a talk on Philippine-China trade August 17 at UP Diliman that Philippine exports to China and HongKong continue to accelerate.

However, trade growth has not been impressive enough considering the vast market opportunities presented by the Asian economic powerhouse, she pointed out.

“The low level of exports to China shows that we have not been capitalizing on China’s huge market. Also, if we compare our trade with China with other ASEAN countries, we also observe that the level and percentage of (exports are lower for the Philippines) than the others,” Palanca continued.

Using statistical data, the professor showed that from 2000 to 2007, Philippine-China trade had been robust, before it faltered in the period 2008-2010 due to the financial crisis.

Bilateral trade growth resumed from 2011 but has slowed recently as the Chinese economy continues to cool down. Also an aggravating factor is the dispute between the two countries regarding sovereignty over territorial waters, said Palanca.

She noted that Philippine exports as a percentage of the gross domestic product (GDP) remain small at “less than 5% for the last three years.” However, she pointed out that trade with China as a percentage of GDP “has been increasing over the years,” while that with the rest of the world is decreasing.

The share of processing products is still big at 70% to 80% of total Philippine exports to the mainland, although the level is now lower than the pre-2008 levels, said Palanca, as production of these products shifts to Latin American and African countries.