The Asian Voice

Philippines should be friends with all countries: Inquirer columnist

In his commentary, the writer says that the country's foreign policy should be defined as being friendly to all countries.

Philippines President Rodrigo Duterte delivers his speech to overseas Filipina workers at the Manila International Airport on Feb 13, 2018.
Philippines President Rodrigo Duterte delivers his speech to overseas Filipina workers at the Manila International Airport on Feb 13, 2018. PHOTO: AFP

MANILA (THE PHILIPPINE DAILY INQUIRER/ASIA NEWS NETWORK) - Not a few are uncomfortable with President Duterte's professed "independent foreign policy" most prominently marked by a partiality towards China and Russia, coupled with open antagonism towards some of the Philippines' longstanding friends.

The latter refers to the European Union and the United States, and, more recently, Canada as well, all being the subject of occasional diatribes by the outspoken President.

He has his reasons, and one hopes there is method to the seeming madness that is not visible to the naked eye.

Members of the Cabinet, including the foreign secretary himself, have been more circumspect, publicly declaring that our independent foreign policy really means friendship with all, in seeming contradiction of their leader's public posturing.

They have to. They are clearly aware of what we stand to lose if we lose the goodwill and much of our economic ties with our traditional Western friends, even as we gain goodwill and boost economic ties with China and Russia.

This is particularly critical at a time when our nation's economic performance and the general wellbeing of our people hinge significantly on our external economic relations, via trade and tourism, investments, foreign employment, and development cooperation.

Let's look at the numbers.

I've gathered the data on our main economic linkages with our major foreign partners as of 2016 (the latest year for which full-year data are available).

This should help us appreciate how important each economic partner is to us within the overall picture.

On foreign trade, Japan is the top buyer of our exports, accounting for 21.4 per cent of the total, followed by the United States (15.9 per cent), Asean as a bloc (15.1 per cent), and the European Union (12.4 per cent).

China comes in fifth with 10.1 per cent, and far down the list is Russia, which took a mere 0.3 per cent of our exports.

On the imports side, Asean as a bloc is now the Philippines' largest source with 26.4 per cent, followed by China (18.4 per cent), although there is likely to be significant undercounting here due to rampant smuggling.

Next down the line are Japan (11.6 per cent), the United States (8.7 per cent), and the European Union (8.0 per cent); Russia is farther down the list with only 0.5 per cent.

As for foreign direct investment inflows, the United States was our top source in 2014-2016, accounting for 31 per cent, with Japan a far second at 11 per cent.

The European Union contributed 2.6 per cent, while China officially recorded a mere 0.4 per cent, or US$53 million (S$70 million), over those three years. (There may be much more than is officially recorded, though. For example, an article in the Journal of Political Risk lists 25 Chinese mining firms known to have a presence in the country as of 2012, but under less than transparent circumstances.)

For Russia, it was actually a net outflow in that period, with data showing net Filipino investments to that country amounting to US$40,000 (S$52,800).

While there has so far been very little interest on both sides, there must be scope for much more.

Regarding remittances, the United States and Europe accounted for 33 and 14 per cent respectively in 2016.

China and Russia accounted for a paltry 0.6 and 0.2 per cent respectively.

As for official development assistance, Japan continues to be our single largest donor with 36 per cent of the total, exceeding the shares of the dominant multilaterals World Bank (20 per cent) and Asian Development Bank (19 per cent).

The United States accounted for 8.6 per cent, and the European Union, 1.4 per cent. China, on the other hand, had 0.01 per cent, and Russia, virtually none.

All together, the much smaller numbers for China and especially Russia might be taken to imply that there is wide potential for expansion of our economic links with them.

Still, the sizes of their economies, at US$11.3 and US$1.3 trillion (S$14.9 and S$1.7 trillion), respectively, as of 2016, pale in comparison with the United States (US$18.6 trillion) and the European Union (US$17.1 trillion), implying that overall opportunities are inherently far greater in the latter two.

To spite them, thinking that China and Russia can make up for whatever we lose, looks rather misplaced, if not outright irrational.

It clearly is in our best interest to be friends with all, and that's how our independent foreign policy ought to be defined and pursued.

The Philippine Daily Inquirer is a member of The Straits Times media partner Asia News Network, an alliance of 23 news media entities.