The Philippines and South Korea have agreed to further develop the supply chain and expansion of trade and investment during the recent second meeting of the Joint Commission on Trade and Economic Cooperation (JCTEC) in Seoul, according to the Department of Trade and Industry (DTI).
Trade Undersecretary and Board of Investments (BOI) Managing Head Ceferino Rodolfo highlighted the vital role of the JCTEC in boosting the relationship between the Philippines and Korea.
“From our inaugural meeting in 2019, significant strides have been taken to deepen our trade and investment relations and our long-standing partnership. We now have a free trade agreement on the horizon, which is yet another testament to our shared vision of achieving mutually beneficial outcomes for our countries,” Rodolfo said.
Recognizing the Philippines as a “valuable trade and strategic partner” of South Korea, Deputy Minister Dae-jin Jeong of the Ministry of Trade, Industry and Energy (MOTIE) underscored the JCTEC as a platform to review and discuss ongoing trade concerns and areas of interest for bilateral relationship.
“The Philippines is the first country in Asean to establish diplomatic relations with Korea, and through the JCTEC, we hope to strengthen cooperation and expand trade and investment ties,” Jeong said.
In a news statement on Friday, the Trade department said both parties agreed to maximize areas for complementation in green metals and related industries such as electric vehicles and semiconductors, focusing on building stable and sustainable supply chains for critical raw materials for production and manufacturing.
“We are positioning the Philippines as a key player in the supply of critical minerals given our vast resources of green metals such as nickel, cobalt, and copper—inputs for the production and manufacture of electronic goods and batteries for electric vehicles. With Korea’s manufacturing capabilities especially in electronics, we hope to pursue a meaningful partnership in this area,” Rodolfo said.
The trade official of South Korea expressed the same sentiment as he called on both countries to work together on pursuing the said endeavor.
In fact, he added, “We will engage in technical discussions to pursue our strategic partnership through the proposed memorandum of understanding (MOU) on core raw materials and critical supply chain cooperation. The Philippines ranks tenth worldwide in terms of mineral production and is especially rich in nickel, chromium, and copper.”
As for energy cooperation, the DTI said in its statement, “Both sides committed to establish a cooperation-based mechanism on renewable energy, energy efficiency and nuclear power.”
In relation to expansion of trade and investment, however, the DTI revealed that the signing of the Philippines-Korea Free Trade Agreement (PH-KR FTA) might have to be delayed. The PH-KR FTA was expected to be signed this year.
“The two nations acknowledged the continuing efforts of both sides in enhancing market access of key products, including the signing of the PH-KR FTA targeted in 2023,” the DTI said in the statement.
According to the DTI, activities to promote the utilization of the FTA through seminars and information sessions were also discussed during the JCTEC meeting held last October 18.
Further, both parties agreed to maintain active engagement on ongoing Official Development Assistance (ODA) projects and to explore other areas for complementation such as collaboration related to the Philippines’s Public Utility Vehicle modernization program.
DTI said the Philippines views the JCTEC as a platform to better identify opportunities, coordinate and streamline activities of shared interest leading to targeted benefits and productive outcomes, especially in trade and investments.
It added that once the FTA is in place, the Philippines envisions that the comprehensive scope of its Ecotech chapter will ensure that both sides will continue to benefit from complementation in priority sectors and areas, especially in manufacturing and infrastructure.
South Korea is the Philippines’ 5th largest trading partner, 8th largest export market and 3rd largest import supplier in 2021. In the same year, South Korea ranked 6th in terms of approved investments, with notable investment activities in construction, real estate, manufacturing, and accommodation and food service.