THE Regional Comprehensive Economic Partnership (RCEP) will support the Philippines’s goal of seeking a “more robust and beneficial” partnership with China, according to the Department of Trade and Industry (DTI).
“The long history of business relations between our two countries, the cooperation in the Belt & Road, and now RCEP will facilitate the further growth and deepening of our bilateral business relations,” Trade Secretary Alfredo E. Pascual said in a recent statement.
Pascual said RCEP will be part of the topics to be discussed during President Ferdinand “Bongbong” R. Marcos Jr.’s visit to China from January 3 to 5.
“As Chinese companies pursue opportunities in RCEP, those looking to diversify their business locations to sustain and enhance regional competitiveness can consider the Philippines a complementary location,” Pascual noted, adding that the Philippines can also be an alternative hub for their production and service facilities.
The Trade chief also noted that with RCEP participating countries making “significant” commitments under the services trade, the Philippines can leverage this as another area for increased bilateral collaboration.
“As Chinese companies pursue ‘going out’ strategies, we can partner while providing support through Philippine talent as a strategic resource. In particular, technological, soft, and people skills will be critical in the services and digital industries,” Pascual said.
Pascual linked this to the country’s track record in supporting the global operations of companies. He said the Philippines’s workforce’s strong customer service orientation also makes the Philippines an “ideal” location for services for getting in touch with customers globally.
With the eventual participation of the Philippines in RCEP, Pascual said they see the regional trade pact boosting the Philippines’s strategic advantage for investments such as being able to enjoy wider sourcing of raw materials from 14 countries, including China, and export processed products from the Philippines to the RCEP parties.
RCEP is a free trade agreement (FTA) among Asean countries and their trading partners Australia, China, Japan, New Zealand and South Korea. Touted as the world’s largest trade pact, RCEP represents 30 percent of the global gross domestic product (GDP).
In 2021, the Trade department said China is the Philippines’s top trade partner, with total trade valued at $38.35 billion. Meanwhile, China is also the Philippines’s second largest export market ($11.55 billion) and a leading import source ($26.8 billion).
“With current trade figures, we also hope to achieve a more balanced level of trade through, among others, further market access to agricultural commodities,” Pascual noted.
Citing the Export Potential Assessment (EPA) undertaken by the International Trade Centre (ITC), Pascual said the Philippines has an opportunity to expand exports to China by an additional $14.1 billion in the next few years given the size of the Chinese market and the “supply capabilities” of the Philippines.
Pascual said the President’s visit to China will pave the way for strengthening the Philippines’s trade and investment relations including building on the country’s “export gains.”
In fact, Pascual listed the sectors with the most “considerable” export potential to China which include: electronic equipment, electrical machinery; metals; optical products, watches, and medical instruments; fruits; motor vehicle parts; processed or preserved food products; fish and shellfish, among others.
