A trade official from the Philippines has highlighted the country’s openness to deepening trade ties with China despite ongoing political tensions, including a protracted dispute over sovereignty in the South China Sea.
Glenn Penaranda, commercial counselor at the Philippine consulate in Shanghai, expressed optimism about Chinese investments in key sectors such as electric vehicles (EVs), renewable energy, smart manufacturing, electronics, and agriculture. Penaranda noted that the Philippines could serve as a strategic manufacturing hub for exports to major markets, including the United States and the European Union.
“The Philippines can be another location or platform for manufacturing for export to major markets such as the US and the EU,” Penaranda said, adding that the return of Donald Trump’s administration in the US is expected to accelerate supply chain diversification.
Bilateral trade between China and the Philippines declined by 0.4% to $71.6 billion in 2024, according to Chinese customs data. While this marks an improvement compared to a sharper 16%
decline in 2023, the Philippines remains one of only two Southeast Asian countries, alongside Myanmar, to record a contraction in trade with China.
Overall trade between China and the Association of Southeast Asian Nations (ASEAN) reached record levels in 2024, highlighting the Philippines’ relatively subdued performance.
Key Philippine exports to China, such as bananas, unwrought copper, and nickel, saw notable declines. Banana exports to China fell by nearly one-third in volume and 39% in value terms, while shipments of unwrought copper dropped 42%. In comparison, Indonesia recorded significant growth in similar export categories, with its banana exports to China rising by 64% in volume and 23% in value.
Despite these challenges, Penaranda remains optimistic about the future of economic ties with China. “While there are declines in the trade of certain products, we believe these are the effects of global market dynamics and some are cyclical,” he said.
He pointed to a strong pipeline of investment interest in manufacturing, particularly in EVs, as a sign of potential growth. “Chinese EV companies are pursuing market opportunities and partnerships to expand the supply chain,” Penaranda noted.
The Philippines is also an untapped market for raw materials critical to battery manufacturing, although China’s nickel imports from the Philippines dropped by 10% year-on-year in 2024.
China’s focus on strengthening trade ties with emerging markets like the Philippines comes as it faces trade barriers from the US and EU. The EU has imposed tariffs of up to 45% on Chinese EVs, while the US announced a 10% tariff on all Chinese products, effective February 1, 2025.
With the Trump administration’s policies expected to drive further diversification of supply chains, Southeast Asia, including the Philippines, stands to benefit from increased investment and trade opportunities.
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