* This is my column in BusinessWorld yesterday, May 03, 2019.
Three China-related business stories in BusinessWorld
last week caught my attention, short quotes from them are shown:
1. PHL, Chinese firms sign $12-B in business deals (April
27):
“THE Philippine business delegation and Chinese companies
on Friday signed 19 deals worth $12.165 billion… This included one contract
agreement, three cooperation agreements, two purchase framework agreements, and
13 Memoranda of Agreement (MoA) or Understanding (MoU).”
2. ALI plans to develop country’s first Sino-PHL
industrial park (April 29):
“AYALA LAND, Inc. (ALI) is riding on the influx of
Chinese firms coming to the Philippines as it plans to acquire up to 200
hectares of land in Central Luzon.”
3. Udenna-China Telecom deal may prompt more Chinese
firms to enter Philippines (April 29):
“THE $5.4-billion deal signed last week by Udenna Corp.
and subsidiary Chelsea Logistics Holdings Corp. with China Telecommunications
Corp. for a telecommunications joint venture may prompt more Chinese firms to
pour investments in the Philippines.”
No details were given in story #1, the Ayala conglomerate
is also cashing in on growing China investments in story #2, and Udenna seems
to be the main entry point for more China investors.
Is the Philippines slowly being swamped by China capital,
China imports, China tourism and visitors?
I checked relevant data to help me answer this question.
On merchandise exports, China is the fourth market of the Philippines in 2018
while its dominance as #1 source of imports is further cemented in 2017-2018
(see table 1).
In foreign direct investments (FDIs), investors from
China catapulted to #4 in 2018 with nearly $200 million, from below $30 million
in 2016-2017. Investors from Singapore, Hong Kong and Japan remain the top
sources of long-term capital in the Philippines (see table 2).
And in tourism, Chinese tourists are inching fast with nearly 1.3 million visitors in 2018, hoping to dislodge S. Korean visitors in a few years while visitors from the US including Filipino-American balikbayans have also breached the 1 million level (see table 3).
China is known for large-scale secrecy in business and
political numbers, there is a tendency to understate or overstate certain
figures. The imports from China figures, while already big, should be much
bigger as it is common knowledge that large-scale smuggling occurs until now
and most of the goods easily land in Divisoria, Quiapo, Baclaran, and other big
mass-market areas.
The huge number of undocumented and un-permitted Chinese
workers in the Philippines is another issue, especially in the Philippines
overseas gaming operations (POGO).
The market-oriented reforms for efficiency (MORE) needed
is to have more transparency in the actual number of workers, tourists,
businesses, investments, imports from China. The DOF, DOLE, SEC, etc. are known
to be strict with Filipino businesses but they seem to be grappling for
regulations and taxation of these Chinese enterprises. President Duterte’s
favoritism with China and Xi Jinping need not be followed by the line agencies.
More on China later.
---------------
See also:
BWorld 319, MORE tourism via PSA liberalization, April 28, 2019
BWorld 320, Good news, MORE power plants coming, May 01, 2019
BWorld 321, IPR and MORE investments, May 03, 2019
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