Vietnam-Philippines Eyeing US$3 Bln Trade Turnover This Year

Vietnam and the Philippines formally established diplomatic relations on July 12, 1976. After 40 years, the two countries have lifted their bilateral relationship to strategic partnership with strong, far-reaching and substantial growth in many areas.

 

In the past years, Vietnam and the Philippines have achieved high political fidelity with regular high-level shuttle visits and expanded cooperation in various fields. Mr Pham Binh Minh, Deputy Prime Minister and Foreign Minister of Vietnam, said the upgrading of the partnership to a new high not only generates momentum for closer bilateral relationship but also contributes positively to peace, cooperation and development in the region as well as the overall ASEAN coherence, and bring more benefits and opportunities for both parties.

 

The Philippines and Vietnam are sea-bordered countries and both respect the importance of ensuring peace, stability, security, safety and freedom of navigation and aviation in the East Sea as well as the settlement of maritime disputes according to international laws, including the United Nations Convention on the Law of the Sea (UNCLOS) 1982, the full implementation of the Declaration on the Conduct of Parties in the East Sea (DOC) and the early adoption of Code of Conduct in the East Sea (COC).

 

According to VCCI, the Philippines is relatively rich in natural resources on land and under the sea and has a variety of minerals such as gold, copper, iron, chromium, manganese, coal, oil and gas. In 2004, the Philippine Government estimates its mineral reserves on land worth US$800 - 1,000 billion. However, the Philippines mineral exports are worth only some US$500 million a year.

 

The Philippines is still an agricultural country where the development level is not high. Its population largely lives on agriculture. Its main crops include rice, maize, coconut, sugarcane, banana, pineapple, coffee, tobacco, cotton, jute, legume and Abaca tree. Previously, its key industries comprised of mining, timber and food processing. Some emerging industries are electronics and apparel. Its services develop strongly, accounting for 54.4 per cent of GDP. Labour export is very important, with over 10 million people working overseas, who send US$10-12 billion to home a year.

 

The workforce of Philippines has high quality and very good English communication skills. Pays for employment, housing and food are quite low. Particularly, the Philippines has a geographically strategic position as it is the gateway of the East Asian economic region and has many important airports and sea ports in support of business development. Economic zones are set up to develop agriculture, industry, trade, tourism and other economic sectors.

 

According to statistics, the two-way trade value between the two countries has increased steadily over the years and Vietnam always runs a trade surplus. In 2012, the value was US$2.835 billion, up 21.17 per cent over 2011, of which Vietnam earned US$1.871 billion and the Philippines took US$964 million. In 2015, it climbed to US$2.926 billion, of which US$2.02 billion was for Vietnam and US$906 million was for the Philippines.

 

Vietnam's main exports to the Philippines include rice, machinery, equipment, tools, spare parts, computers, electronic products and components, telephones and components, seafood, coffee, apparels, plastics, iron and steel.

 

Meanwhile, its key imports from the Philippines are computers, electrical and electronic products, iron and steel, machinery and equipment, electrical wires and cables, animal feeds and raw materials, scrap steel, tobacco, and automobile parts.

 

The Philippines invested US$328 million in 73 projects in Vietnam as of 2014, ranking 32nd out of more than 100 countries and territories investing in Vietnam and 6th among ASEAN countries. In 2015, the Philippines invested US$5.45 million in four investment projects in Vietnam.