Philexport: No significant impact on trade

CEBU, Philippines - The Philippine Exporters Confederation Inc. in Cebu said that the Permanent Court of Arbitration (PCA) ruling in favor of the Philippines against China in a territorial sea dispute has no significant impact on trade so far.

"No effect on trade yet as the Philippines has made no official statement on the decision," Philexport-Cebu Chairman Apolinar Suarez Jr. told The FREEMAN. ,

"Well, we don't really expect anything (effect) yet since we are still on a wait and see mode on what will be the Philippine official statement," Suarez said.

But the Philexport official said that exporters hope for the best as far trade is concerned.

Earlier, Department of Trade and Industry Secretary Ramon Lopez said the United Nations-backed tribunal ruling won't affect trade negatively.

According to the Philippine Statistics Authority, China, the world's second largest economy, is the the country's second largest trading partner in 2015 with total trade worth $17.6 billion or 13.6 percent of total trade.

Export receipts from China stood at $6.2 billion while payment for imports totaled $11.5 billion.

In terms of imports, China is the country's top commodity import market, based on PSA data. From January to April 2016, imports from China grew by 28 percent.

However, exports to China from January to April this year fell by 16.49 percent. Although Philippine exports in general have been falling in the past 14 months due to slow global demand brought by sluggish global economy.

Analysts have also blamed the global economic uncertainty to the slowdown in China's economy.

As of April this year, bilateral trade between the Philippines and China is valued at $1.7 billion.

For his part, Philexport-Cebu president Nelson Bascones said yesterday that most exporters, including himself do not feel any disruption business-wise while both governments are trying to fix diplomatic issues.

Cebuano exporters noted an improving demand from China in the recent months, especially for processed food, and seafood products.

 "More and more marine products are shipped to China now, from Cebu," said Bascones, who owns Central Seafoods Inc.

In the first semester of 2015, the mainland accounted for US$7.8 billion or 13.1 percent of Philippine total trade.

 From January to June 2015, exports to China reached $3.1 billion in value, while Philippine imports from the Southern Asian nation totaled $4.7 billion, reflecting a trade deficit of $1.7 billion for the Philippines.

 Majority of Philippine exports in the first six months of 2015 were electronic products, worth $1.5 billion, or 49.9 percent of the country’s total goods shipments to China.

 Cebu is heavily supplying frozen squids and fishes, Bascones said although there is also growing orders for other types of agricultural processed food.

The export sector in Cebu joined other industry leaders saying the conflict between the Philippines and China has not in a way affected the trade relations between Filipino and Chinese businessmen.

Earlier, Filipino-Chinese Chamber of Commerce and Industry (Fil-Chi Cebu) president Dickson Lim expressed confidence that amid the political tension between two countries, trade and commerce relations remain stable.

 "We are rival at sea but allies in trade. The Philippines always want to separate economic ties from maritime dispute. Ever since, trade between the two countries has been increasing every year," Lim said.

China is the second top trading partner of the Philippines after Japan, according to the Philippine Statistics Authority (PSA).

 For the whole of 2014, total bilateral trade topped $18.3 billion, or 14.3 percent of the Philippines’ total trade, according to PSA.

 PSA record also showed that exports to China stood at nearly $8.5 billion, while imports from the mainland were valued at $9.9 billion, resulting in a $1.4 billion trade deficit.

Leading Philippine exports to China in 2014 were electronic products, with receipts amounting to $3.9 billion, or 46.5 percent of the country’s exports to China. (FREEMAN)