MANILA -- To make more investments happen in the economic zone area, the Philippines welcomed China’s proposal on the “Two Countries, Twin Parks” project, an avenue that will pursue cooperation on industrial parks between both countries, as announced by the Board of Investments (BOI) during the Regional Comprehensive Economic Partnership (RCEP) - Electrical Industry Cooperation Matchmaking online event recently (December 10, 2021).  

Trade Undersecretary and BOI Managing Head Ceferino Rodolfo recognized the importance of the said proposal, particularly if the locators in both economic zones will engage in intra- and inter-industry trade and outsourcing activities.  “We see a potential synergy between the two economic zones in China and the Philippines,” the Undersecretary said in a video message during the said event.  

According to the official, aside from promoting complementary markets, the tying up of both economic zones can help boost tourism, movement of goods, people and services, technology, and Foreign Direct Investment (FDI) inflows in both of the markets. The Philippines is prepared to assist China in identifying potential private sector partners for the development of the industrial parks in the country, and three investment promotion agency (IPA) Industrial Zone Projects in the country are open to a potential partnership with foreign investors, bared the BOI official.  

At present, the Undersecretary said that the BOI is assisting at least three big mega-ecozone developers with big-ticket projects in Saranggani, Pangasinan, and Clark in Pampanga. Under the new economic zone model of the Philippine Economic Zone Authority (PEZA), he added, the Chinese investors, together with their Philippine partners, will develop economic zone into “eco-townships or smart cities, complete with embedded renewable energy sources and other utilities, a dedicated port, and a self-sustaining business eco-system to support the growth of industry clusters.” 

The Undersecretary acknowledged the role of China as an important complementary business partner of the Philippines, as both are parties to the RCEP Agreement, which has been ratified by President Rodrigo Duterte and will be submitted to the Philippine Senate for concurrence.  

The said digital event in Wenzhou is part of the preparations for the implementation of RCEP through the RCEP Industry Cooperation Committee. The RCEP enters into force in January 2022, which will optimally benefit from the growth potential of the market member economies. “We are targeting to complete the whole process within this year. The RCEP will build on our already strong international partnership thru the ASEAN-China Free Trade Agreement,” the Undersecretary explained.  

From January to October this year, China’s trade with the RCEP member states reached USD1517.16 billion or 31 percent of China’s total foreign trade, wherein its exports to RCEP member states were USD702.96 billion, while exports from RCEP members states stood at USD814.2 billion. 

The Undersecretary recognized that investment opportunities between both countries could be explored in the areas of assembly and manufacture of finished products; establishment of complementary location within the region in the Philippines, especially for high technology export products; and innovation & digital technologies or start-ups, which is now a growing ecosystem in the country.  

Through its competitive incentives, said the Undersecretary, the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law will buttress investments, which was signed last March 26 this year. Undersecretary Rodolfo shared that the BOI has been assisting Chinese manufacturing companies and one of those is the Shenzhen Grandsun Electronic Company Limited, a component supplier of a European company with a presence in the Philippines.  

Notwithstanding the persisting pandemic, the Undersecretary expressed his optimism on a “strong partnership” with the China-ASEAN Business Council (CBAC), and that relevant industries and enterprises from the Philippines, China, and the RCEP partners could effectively move forward with business cooperation opportunities “to elevate their relations further.” 

The Department of Trade and Industry (DTI) and the CABC signed a Memorandum of Understanding (MOU) on Economic and Trade Strategic Cooperation Framework. “As the taking effect of the RCEP is a month away, the CABC and the RCEP Industry Cooperation Committee are assisting the synergistic cooperation of specific industries and enterprises in RCEP member states to improve the effectiveness of cooperation,” the Undersecretary said.  

Attended by the partners in the national chambers of commerce and industry of RCEP countries and representatives of notable Chinese enterprises, the conference was co-sponsored by the CBAC, the RCEP Industry Cooperation Committee, and the Wenzhou Municipal Government of China, aiming to promote the electrical industry among RCEP member states as a “pilot industry of regional industry cooperation.”  

Known as the "China’s Electric Hometown,” Wenzhou in Zhejiang Province is a place for 11,000 electrical industry manufacturers, as the value of its electrical industry ranks among the top cities in China last year with the total output value of about 163 billion yuan with a year-on-year increase of seven percent. As the electrical industry in the RCEP area is highly complementary, ASEAN and China's electrical industries are developing.  

On trade and investment, out of 225 countries, China was the Philippines’ top trading partner last year, its third-biggest export market out of 212, and top import supplier out of 205. While from January to September of this year, China was the country’s second major export market, accounting for 15.7 percent of total export; and also the top country source of imports, with a share of 23.9 percent.  

Traditionally, shared by the BOI official, China has been one of the leading sources of foreign investments into the Philippines. Since the start of the Duterte administration, total Chinese-approved investments by the Investment Promotion Agencies (IPAs) ballooned to Php165 billion (US$ 3.3 billion) for the period 2016 to the Q1 2021 with an average annual growth rate of 59 percent and with the projected employment of 23,000. 

Furthermore, some of the major products the Philippines is exporting to China are Inputs and Components; Mineral commodities, such as nickel and copper; bananas, pineapples, and mangoes. While the major imports of the Philippines from China are semiconductors, electronic parts, and components; and finished electronic and IT products, among others. (BOI)