With Britain’s exit from the Europe Union, Asean-member countries are likely to become targets for new trading arrangements with the UK – something which incoming Philippine Department of Trade and Industry (DTI) chief, Ramon Lopez, will be exploring very closely. The opportunity to get closer to the world’s fifth largest economy, after the US, China, Japan and Germany, will be very attractive given the current state of the Philippine export industry. Philippine exports – becalmed
Certainly, there is plenty to build on. Trade ties between the two countries have been growing steadily over the past five years. The UK is the largest European investor in the Philippines. Last year, bilateral trade increased by 50%. The UK has a net foreign direct investment stock in the Philippines of US$5 billion. According to UK Trade & Investment, a non-ministerial government department, there are presently around 200 British companies set up in the country. These include banks, HSBC and Standard Chartered; energy company, Shell; retailer, Marks & Spencer; consumer-goods producer, Unilever; pharmaceutical biotech company, AstraZeneca; agricultural-equipment manufacturer, JCB; the world’s largest spirits producer, Diageo; business consultancy, Arup; fashion retailer, River Island, and engineering consultants, the Halcrow Group.
In January, Manila and London started crafting an Enhanced Trade and Investment Economic Partnership agreement. Its focus is on infrastructure, sustainable energy and education. That agreement is expected to be completed later this year. The two countries have a Bilateral Investment Agreement for the Promotion and Protection of Investments which has been in force since 1981. And both countries are committed to raising the profile of their economic relations. (Japan has had an Economic Partnership Agreement with the Philippines since 2008).
The Philippines might also look to participate in the South East Asia Prosperity Fund, part of the Foreign and Commonwealth Office’s US$28 million finance package to support global prosperity and economic growth.
The UK already has an establish trade-promotion network in the Philippines including the British Embassy Manila, permanent Department of Trade and Industry representation, and the British Chamber of Commerce Philippines, while for the region as a whole there is the London-based UK-Asean Business Council which was established in 2011. Areas of opportunity for Philippine exports to the UK, according to the DTI’s Export Marketing Bureau are wide ranging – from food to furniture to apparel; automotive parts to electronics.
Unrestricted trade deals with Asia – notably, with China, Japan and Asean – is very much a part of the British Government’s post-EU strategy. Prime Minister David Cameron’s Southeast Asia visit last July was to strengthen trade links with the region. Asean member, Singapore, is the UK’s largest trading partner in Southeast Asia and its fifth largest export-service market outside Europe. As far as China is concerned, according to China Construction Bank’s chairman, Wang Hongzhang, Brexit will not harm their economic ties or financial relations.
For the Philippines, then, Britain’s departure from the EU could be just what its troubled export sector needs.