The Trade Department is optimistic bilateral trade between China and the Philippines will continue to prosper despite a tense political atmosphere.
Trade Secretary Ramon Lopez told reporters in an interview the department had not seen any indication of trade slowing down.
“We don’t see any impact offhand. Even prior to this decision, we see the trade ongoing. We export a lot to China. They export also to us. I say it’s safe to say that we do not see any impact. In fact, we expect trade to even expand further,” he said.
Meanwhile, a potential boycott by China of Philippine products in the wake of an international tribunal ruling that favored the Philippines will negatively impact on the growth of the domestic economy, an analyst said Friday.
Tim Condon, ING Bank chief economist in Asia, took into consideration China’s standing as the Philippines third-largest exports destination (13 percent) after Japan (22.5 percent) and the United States (14.1 percent).
“… So an official boycott that reduced exports to zero would be a significant negative growth shock. Exports are 48 percent of GDP so simple arithmetic puts the size of the shock at 6 percentage points,” Condon said.
“Obviously there would be offsets: imports would shrink for example. But closure of the China market would be bad,” Condon said.
Condon said “cooler heads will prevail and trade relations will go on as before.”
Chinese netizens have used social media to call for a boycott of Philippine products, specifically mango.
But China-based business groups do not fear reduced trade by virtue of a decision by a United Nations body that ruled against China in a bitter row over territorial claims in the South China Sea, or West Philippine Sea. The court concluded that there was no legal basis for China to claim historic rights within the sea areas falling within the so-called “nine-dash line.”
The China Chamber of Commerce for Import and Export of Machinery and Electronic Products earlier said diplomatic and territorial disputes would not affect trade relations between China and the Philippines.
Trade statistics from China showed that the bilateral trade volume between China and the Philippines rose 2.7 percent to a record high of $45.6 billion in 2015.
China was the second biggest trading partner of the Philippines, the top import source and third export market.
The Chinese group also noted that more world-class manufacturers from China were interested in expanding their business ventures in the Philippines.
China has earlier called for the strengthening of the China-Asean Free Trade Agreement through an initiative on maritime cooperation interntationally known as the 21st century Maritime Silk Road. With Julito G. Rada