TRADE Secretary Alfredo E. Pascual has underscored the importance of “friendshoring” or maintaining allies with countries as the Philippines can benefit from this amid the ongoing geopolitical shifts.
That need, he explained in a televised interview on Monday, is among the key reasons the Philippine government “decided to join [Regional Comprehensive Economic Partnership] RCEP given that there is a need to have a bloc of friends…friendly countries around us.” Pascual added that these countries are the ones that the Philippines can trade with at reduced tariffs as well as establish common set of rules with.
The Trade chief also noted that the “geopolitical shifts” paved the way for “various alternatives”. In line with this, he said that issues such as stability, assurance and security have prompted countries in the global arena to explore how to “arrange or rearrange the global trade.”
For instance, Pascual said, “In the US, they are pursuing for example onshoring or nearshoring; they are bringing back semiconductor manufacturing operations and [research and development] R&D back to the mainland US.”
But at the same time, the Trade chief said, “friendshoring is an important move because we are friendly to certain countries and those countries which have investments in the region that they want to relocate to, we can catch some of those ships.”
Meanwhile, Pascual bared in the same interview that he is set to visit China by the early part of the third quarter of this year. He said he intends to “talk to companies that are diversifying their locations and we can catch some of them to locate in the Philippines.”
At a news forum last week, Board of Investments (BOI) Executive Director Evariste Cagatan disclosed that the BOI, the attached agency of the Department of Trade and Industry (DTI) which Pascual chairs, is pursuing investors, particularly those who are leaving China.
“Another sector that left China and which we are eyeing are the makers of electric vehicles and battery processors,” Cagatan said in a recent forum, speaking partly in Filipino.
In December, Pascual underscored the importance of diversifying supply, noting that it’s risky to just rely on a single source country especially with the recent “geopolitical developments.”
The Trade chief also earlier said the Philippines is looking at capitalizing on investors with production operations in China to have alternative production operations in the Philippines.
Meanwhile, according to a Bloomberg report published on June 20, 2022 which cited a report by the European Union Chamber of Commerce in China, “Some 23 percent of the businesses that responded to the survey are thinking of moving their current or planned investments away from China.”
The Bloomberg report noted that the survey showed that Association of Southeast Asian Nations (Asean) and Europe are “among most considered alternatives.”