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A broader look at today’s business Sunday, February 2, 2025 Vol. 20 No. 113
WIDENING TIES, TRADE IN A TROUBLED WORLD www.businessmirror.com.ph
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P25.00 nationwide | 3 sections 16 pages | 7 DAYS A WEEK
By Cai U. Ordinario
MIKHAIL MISHCHENKO | DREAMSTIME.COM
HE handwriting on the wall. Philippine officials are keenly reading this in 2025, when the uncertainties of the past year are expected to linger, and headwinds threaten every single source of growth and progress. To make sure its bag of options can respond to any single source of peril, the government is looking to expand the country’s horizons not just in trade, but also in its sources of investments and financing.
The Philippines is veering away from multilateralism and intends to pursue more bilateral and regional free-trade agreements (FTAs), according to Neda. This, while casting a wider net for other sources of investments and financing.
Rosemarie G. Edillon, Neda Undersecretary for Planning and Policy: “We are looking to come up with many more of these regional FTAs. Because we have seen the thrust, the tendency is really moving away from multilateralism, it’s really veering toward regional or even bilateral trade agreements.” NONOY LACZA
The Philippines is veering away from multilateralism and intends to pursue more bilateral and regional free-trade agreements (FTAs) moving forward, according to the National Economic and Development Authority (Neda). In a briefing on Thursday, Neda Undersecretary for Planning and Policy Rosemarie G. Edillon said the Philippines is looking to cast a wider net to secure more bilateral engagements and FTAs with nontraditional partners in the hope of expanding its markets and forging new trade partnerships. Edillon said after the ratification of the Philippines-Korea FTA and the progress achieved in the FTA negotiations with the United Arab Emirates (UAE), the public can expect more FTAs to surface from the pipeline. “We are looking to come up with many more of these regional FTAs. Because we have seen the thrust, the tendency is really moving away from multilateralism, it’s really veering toward regional or even bilateral trade agreements. So yes, we will be pursuing that,” Edillon said. Edillon said the government intends to leverage and maximize the recently forged Philippines-South Korea FTA and increase investments in post-harvest facilities for bananas and other tropical fruits. She added that the Luzon Economic Corridor partnership with the United States and Japan will also help support infrastructure development and market access. The government, she said, is also exploring easing visa requirements and actively participating in initiatives such as the proposed Asean common visa policy to en-
hance visitor inflows. On another front, negotiations between 27-member bloc European Union and Philippines are expected to deliver “well and fast” as talks are set to resume on February 10 in Manila, according to the EU ambassador to the Philippines. “A first round for negotiations took place in October 2024, a second round will be hosted here in Manila, mid-February. So the second round is foreseen from the 10th to the 14th of February. So it’s four full days of work,” EU Ambassador to the Philippines Massimo Santoro said at the recent 9th Joint Economic Briefing. The EU envoy’s optimism on the progress of the talks for an FTA rests on the fact that the Philippines is “only the sixth economic partner of the European Union among Asean countries.” “We can do more. We can do more considering the potential and the size of the Philippine market and the resources of the country,” Santoro underscored. The EU ambassador said the objective of the free-trade deal is to bring bilateral economic ties between the EU and the Philippines to a “new higher level.” “Through the FTA, we aim at facilitating not only merchandise trade, but also trade in services and to create more incentives for investment,” said Santoro. In 2023, the EU was the Philippines’ 5th largest trading partner, 6th export market and 6th import source. Philippine exports to EU amounted to $8.37 billion, while imports from the 27-member bloc reached $7.79 billion. In 2023, the top Philippine ex-
ports to the EU were electronics, semiconductors, coconut oil and tuna. On the sidelines of another event, Undersecretary Ceferino Rodolfo told reporters that he’s been prodding the EU side to fast-track the talks for the free-trade deal because, he said: “If you look at the interest of the US and EU, they are really on agricultural products.” Elaborating, he said that for the Philippines, this is a matter of “diversifying our import sources for these products.” “But for them they are really competing head-on when it comes to agricultural products on geographical indications such as the Parmesan cheese,” added Rodolfo. As defined by the World Intellectual Property Organization (WIPO), geographical indication (GI) is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin. In order to function as a GI, a sign must identify a product as originating in a given place.
Development aid
APART from trade and tourism, the Philippine government is also expanding its horizons when it comes to Official Development Assistance (ODA) sources. Edillon said amid the freeze imposed by the United States government on its ODA to various countries, the Philippines has not received any communication from its counterparts from the US government regarding this. Currently, Edillon said, the country’s other development part-
ners continue to extend ODA grants and loans to the Philippines. Nonetheless, the Philippines is already preparing for the eventuality that these ODA funds will dry up. “We’re being faithful to our borrowing program, to our fiscal program. So hindi rin naman talaga basta-basta [it’s not something that can be shrugged off], but just to say that we are also preparing for the eventuality that these ODA funds will dry up,” Edillon said. One of the ways that funds are being raised is through Public Partnership Projects (PPPs). Edillon said PPPs have become a good source of development financing for the country and have already been reflected on the country’s economic performance. Based on the latest GDP numbers released by the Philippine Statistics Authority (PSA), Gross Fixed Capital Formation and Gross Value Added in Construction showed that General government only posted single-digit growth in the last two quarters of 2024. Based on the data, General government growth slowed to 4.9 percent in the fourth quarter of 2024 and 3.7 percent in the third quarter of 2024 from the 14.9 percent posted in the last quarter of 2023 and 27.3 percent posted in the third quarter of 2023. “Another factor there is that we have a number of infrastructure that is being done with PPP, so if it’s PPP it’s not included in General government,” Edillon said, partly in Filipino. “We still want to spend on infrastructure but as I said, spending is different from the sources of the financing.”
Flagship projects
BASED on the latest data from Neda, majority of the seven infrastructure flagship projects (IFPs) that have been completed as of 2024 were financed through ODA, while the others were funded by the national budget. The completed IFPs financed through ODA were the Arterial Road Bypass Project Phase III (Plaridel Bypass) and the Flood Risk Improvement and Management Project for Cagayan de Oro River (FRIMP-CDOR). The list also includes the Integrated Disaster Risk Reduction and Climate Change Adaptation
(IDRR-CCA) Measures in the LowLying Areas of Pampanga Bay Project; Panguil Bay Bridge; and the Samar Pacific Coastal Road Project. The two other completed IFPs that were financed through the national budget were the PasigMarikina River Channel Improvement Project, Phase V and the Surallah-T’Boli-San Jose Road, South Cotabato. The seven completed IFPs had a combined total project cost of P43 billion and were composed of projects implemented by the Department of Public Works and Highways. With earlier reports by Andrea E. San Juan
ARAW NG BIÑAN C1-C4
THE BIÑANENSE SPIRIT OF RESILIENCE AND COURAGE TRIUMPHS IN THREE-DAY FESTIVITIES
PESO EXCHANGE RATES n US 58.3620 n JAPAN 0.3782 n UK 72.5031 n HK 7.4904 n CHINA 8.0633 n SINGAPORE 43.1352 n AUSTRALIA 36.2253 n EU 60.6440 n KOREA 0.0404 n SAUDI ARABIA 15.5591 Source: BSP (January 31, 2025)