By Tan Xingyu
“The Philippines is still one of the best performing economies in the Asia Pacific region, and its outlook is promising,” said Carlos Dominguez III, Secretary of Finance of the Philippines, sparing no effort to illustrate the promising prospects of Philippine economic development to 500 Chinese investors during a March trip to Beijing. At the 2019 Philippine Economic Briefing hosted by the Philippine government, several senior Philippine government officials talked about their economic performance and prospects, introduced various infrastructure projects under the “Build, Build, Build” program, and invited Chinese investors to the Philippines to better understand the great opportunities created by the continued growth of the Philippine economy.
Embracing Chinese Capital
In the opening speech of the meeting, Mr. Dominguez reviewed the healthy economic and trade relations between the Philippines and China. China is one of the largest import and export markets for the Philippines and one of the Philippines’ most important sources of foreign direct investment. Dominguez also stressed that the Philippine “stable financial situation” has paved the way for the government’s ambitious infrastructure construction plan, which echoes China’s Belt and Road Initiative. “The Philippines and China are well prepared for economic development,” Dominguez asserted. “The Philippine economy is developing rapidly, and tax reform is making it more and more business-friendly. It is a perfect investment destination. We hope to create a seamless logistics network and borderless cooperation in the next few years.”
Mark Villar, Secretary of Public Works and Highways, stressed the importance of the Philippine “Build, Build, Build” program, which is more than a goal according to him. “This is a golden age of infrastructure construction,” he opined. “Our goal is not just to build, but to perform sustainable construction.”
Vivencio B. Dizon, president and CEO of Bases Conversion and Development Authority (BCDA), invited guests to invest in New Clark City as envisioned by President Duterte. “Our cooperation with China has never been so close,” Dizon remarked. “Investment in the Philippines by Chinese companies, including both State-owned companies and private companies, will further strengthen the partnership between the two countries.”
Diwa Guinigundo, deputy governor of the Central Bank of the Philippines, stressed that the Philippines’ economic development is “widely based, with strong spending power and support for industrial and manufacturing recovery.” He added, “According to current market expectations, the inflation rate will drop further. The 2019-2022 inflation target is in line with the government’s non-monetary policy.”
After the economic briefing, Diwa Guinigundo and Rosalia de Leon, the national treasurer, participated in a road show, met with executives from various financial institutions in China and discussed the advantages of the Philippine credit situation. The Philippine government plans to issue panda bonds later this year.
Promising Prospects for China-Philippines Economic Cooperation
The Philippines has been one of the fastest growing economies in recent years. As of the fourth quarter of 2018, its GDP grew by more than 6 percent for 15 consecutive quarters. From the perspective of various economic indicators, the Philippine economy is growing fast and with high quality. Many economic indicators show outstanding performance including sound fiscal position, abundant foreign exchange reserves, low inflation expectations, and a growing number of well-educated young people. This has attracted more foreign investment, and the government’s investment in education and health continues to grow as financial and banking systems remain stable.
Cao Yuanzheng, chief economist at the Bank of China, and Wu Wenlai, chairman of China National Offshore Oil and Gas Group, attended the meeting and stressed that Chinese investors are committed to seeking high-quality services and investment in the Philippine “Build, Build, Build” program. Cao expressed optimism that China and the Philippines could “build a beautiful new world together” and said that Chinese people have “good feelings” about the Philippine people.
In recent years, the Philippines has continuously expanded its foreign investment and continued to optimize its business environment. China’s investment in the Philippines still has plenty of room for growth. During Chinese President Xi Jinping’s November 2018 visit to the Philippines, China and the Philippines signed several cooperation agreements for the next 10 years covering transport, agriculture, irrigation, fishing ports, electricity, water management, information and communication technology (ICT) and telecommunications. It was reported that China and the Philippines would establish economic cooperation zones to promote the economic development of the Philippines while creating more employment opportunities in the Philippines.
With the continuous advancement of China’sBelt and Road Initiative, the Philippines has also responded enthusiastically. “Our ‘Build, Build, Build’ program echoes China’s larger and wider Belt and Road Initiative,” declared Dominguez. The Minister noted that China is one of the largest import and export markets for the Philippines and a major donor in the Philippines’ official development assistance including assistance for major infrastructure projects. China is also one of the most important sources of foreign direct investment in the Philippines. In recent years, the Philippines has continuously expanded its foreign investment while optimizing its business environment. China’s investment in the Philippines still has a lot of room for growth.
When Dominguez previously met with Chinese Minister of Commerce Zhong Shan, he said, “The Philippines is eager to participate in the upcoming ‘Belt and Road’ forum because it is the main catalyst for promoting more comprehensive international cooperation. We are grateful for China’s Belt and Road infrastructure plan, which will connect Asian and European economies closely. The Belt and Road Initiative will pave the future of this century and the next. We look forward to more strategic infrastructure projects with Chinese funding.”
Philippine media has reported that the “Build, Build, Build” program has secured two loans from China, US$62.09 million for the Chico River Pump Irrigation Project, which has been budgeted at 4.37 billion pesos (US$83.8 million), and US$211.2 million for the New Centennial Water Source Kaliwa Dam Project, which is expected to cost 12.2 billion pesos (US$234 million).
Copyedited by Tian Yuerong