The Philippine Ambassador’s View on Philippine-Italian Economic Relations

 

Philippine-Italian co-operation has grown over the years since the establishment of diplomatic relations on 9 July 1947. The relationship has gradually expanded across its various aspects, including political and economic co-operation and people-to-people ties. I believe the bilateral relations can grow further and have yet to reach their full potential, especially in economic co-operation.

For example, trade between the Philippines and Italy has been growing strongly over recent years. Total trade between the two countries almost doubled between 2013 and 2018, rising to EUR867.8 million from EUR448.3 million.[1] While the pace of trade growth is rapid, I believe that there is still a lot more room to grow.

The Philippines, as one of the fastest-growing economies in Asia, provides many opportunities to expand economic co-operation. The Philippine economy has grown by an annual average of 6.5% since 2012, characterized by sound macroeconomic fundamentals and driven by strong domestic consumption, government spending, and robust services and industry sectors. Currently, the Philippines is undertaking its Build Build Build programme, ushering in a golden age of Philippine infrastructure. A testament to the Philippine economy is the upgrade by Standard & Poor’s of the Philippines’ credit rating to BBB+ last April.

These factors, along with the country’s young, well-educated working population, provide many opportunities for Italian companies to invest in the Philippines. This is in addition to the fact that the Philippines benefits from the European Union’s Generalised Scheme of Preferences Plus (EU-GSP+). Over 6,000 Philippine products enjoy zero tariffs when exported to the EU, making the Philippines a strategic and cost-effective source of imports for Italian companies.

Other aspects of economic relations have also seen positive developments over the years. Tourism has witnessed steady growth over the years, with a total of 35,178 Italian nationals visiting the Philippines in 2018, indicating a 15.6% increase on the previous year and about 77% growth since 2014.

The Philippines and Italy also enjoy strong people-to-people ties, on which economic co-operation can be built. Italy hosts the second-largest Filipino community in the EU. As of 1 January 2018, there were 161,609 registered Filipinos in Italy according to Italian government data. This does not include dual citizens and therefore the Filipino footprint in Italy is likely to be larger.

While much has been achieved, I believe more can still be done. And both the Philippines and Italy have committed to doing more. In 2017, on the 70th anniversary of diplomatic relations, the two countries signed a memorandum of understanding, creating the ‘Philippines–Italy Bilateral Consultations Mechanism’ (BCM). The BCM will facilitate regular meetings between the two governments in order to shepherd the bilateral relations. In October 2017, at the first meeting of the BCM, the two countries agreed to expand economic co-operation, seeing the sectors of agricultural machinery, infrastructure and textiles as possible areas of co-operation.

I look forward to continuous dialogue and engagement between the Philippines and Italy to jointly develop more opportunities for mutually beneficial forms of collaboration and business-to-business co-operation. I believe our countries are ready to advance their economic relationship into the new decade.

 

 

[1] All trade data are sourced from trademap.org, International Trade Center, 2018.

 

 

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