Private sector opinion on Philippines-Australia trade

(Message delivered at the Philippines Australia Ministerial Meeting business luncheon, Sofitel Hotel, Oct. 9, 2008)

Allow me to quote Australia’s Prime Minister Kevin Rudd when he addressed the Oz Asia Symposium in Adelaide a couple of weeks ago…and I quote: “Engaging with, cooperating with, active collaboration with the rich economies and societies of greater Asia is critical to Australia’s economic future. I would argue if you speak the language, you understand the culture. It’s about having the door open to begin with,” unquote.

These are indeed very encouraging sentiments that we at the PABC would like to see translated into practical terms. The PABC is optimistic that with the Australia’s renewed focus on Asia, the Philippine Australia relationship will continue to improve for mutual benefit.

Since 1975, the PABC and the APBC have championed initiatives to enhance the bilateral relationship much has been achieved and accomplished over the past 38 years for Australia and the Philippines to now experience a warm and friendly relation.

Unfortunately from a trade perspective there is much work to be done by the Philippine side to reduce the trade gap. The huge difference in trade figures in Australia’s favor strongly suggests indifference by Philippine business to seriously consider Australia as a lucrative and profitable export market.

It is more realistic to accept that the trade imbalance will continue to exist. However the PABC is confident that the Philippines will eventually enjoy a favorable investment surplus from an industry that is poised to singularly contribute to move the Philippine economy forward.

In the meantime there are other opportunities that need to be looked at.

The PABC continues to suggest to both governments that the bilateral relationship should focus its delivery in Mindanao as its main beneficiary. The PABC is of the opinion that economic progress in Mindanao will have a positive and substantial contribution to addressing Australia’s regional security issues.

To achieve this, the PABC continues to support and champion the expansion of the roll on roll off project in Mindanao. The ultimate objective is for Mindanao businesses to realign its attention not back north to Manila but further south into the BIMP EAGA area and then beyond to the northern territory of Australia.

The PABC encourages Philippine exporters to look at the northern territory as the geographic gateway to Australia capitalizing on the Darwin to Adelaide railway as linkage to the markets of South Australia and Western Australia. The southerly direction also points at export markets of the Pacific Island economies which are non-traditional markets for Philippine exports. Papua New Guinea, Tonga, Noumea, Vanuatu, and even smaller nations like Niue.

In turn, Australia may consider the Philippines as its partner in exploring third country markets.

For example, Australia is good at growing cattle whilst Mindanao has abundant fodder for fattening, as a consequence it is possible to consider the merits to jointly develop a halal food industry for third country export.

As an extension to the roll on roll off project the PABC submits for bilateral consideration the naval and maritime cooperation for peace and development. The naval and maritime cooperation for peace and development optimizes two significant Philippine resources - its rich mineral and human resource relative to shipbuilding and Australia’s own shipbuilding technology, facility management, information and communications technology.

There is much to be said about the national and international merits of concentrating bilateral delivery in Mindanao. But this will not happen unless the Australia travel advisory creates a distinction between generally peaceful areas such as Davao and Cagayan de Oro relative to the rest of Mindanao. We urge the Australian government to reconsider these two areas as the negative advisory is detrimental to investors.

In the area of human resources the PABC suggest that Australia contributes in practical terms to Philippine skills replenishment.

The PABC seriously suggest that Australia acknowledges and accepts its partnership role to ensure that the Philippines continues to be a major regional source for Australia’s increasing requirement for professional and skilled migrants. Australia immediately benefits from productive and skilled Filipino migrants on arrival in their new country - accountants, engineers, welders, mechanics, information technology in fact in all professional areas.

Granted that migration to Australia is a personal and private decision. However, Australia, because of its attractive migration incentives attracts the quality migrant it targets. In simple terms, Australia harvests these skills without contributing a single cent to the development of these individuals. The PABC suggest that Australia likewise contributes to ensure that the local skills and standards are upgraded and maintained and not just drained. This guarantees a continuing source of migrants, trained according to Australian and international standards.

In fact, this concept may even lead to the export of Australian standardized equipment and construction supplies. Domestically we are also assured that our own development and progress is not hampered by lack of tradesmen, and professionals who are lured away by migration.

The PABC calls on other bilateral business councils to likewise champion the concept of skills replenishment.

In the area of education, the PABC also lobbies for equivalency between Philippines and Australia education in academic, vocation and technical qualifications.

The PABC was instrumental in having a La Salle University, Ateneo University and University of the Philippines graduates recognized by the Australian Educational system.

The PABC also recommends to the mining sector to investigate and incorporate the merits of a food security program and poverty reversal as a component of mining’s social development management fund commitment.

These summarizes the PABC talking points for PAMM.