Malaysian traders are now more optimistic about doing business with Filipino entrepreneurs.
Malaysian Trade Minister YB Dato’ Sri Mustapa Mohamed says the Philippines’ growing population, now at more than 100 million, and fast rising economic growth which is forecast to average 6.2 percent annually between 2018 and 2020, offer enormous opportunities to expand bilateral trade and investments.
“Despite being Malaysia’s fourth largest trading partner among Asean countries, I feel that our trade has not reached its full potential. In comparison with other Asean countries, our bilateral trade with the Philippines is relatively modest, and hence more vigorous efforts and marketing activities need to be undertaken to further stimulate stronger growth of trade,” he says.
Mohammed attended the recently concluded Malaysia Promotion Programme, a significant initiative, brought by the Malaysian government and private sector together as a National Blue Ocean Strategy , to promote and enhance Malaysia’s brand and visibility as an ideal trade, investment and tourism destination.
The Philippines was chosen as the first country in Asean for the program which was held on March 11 to 18. It kicked off with a Malaysian food fair dubbed as Citarasa Malaysia.
Malaysia considers the Philippines as the perfect choice for the first MPP.
“The expanding economy and the introduction of more business friendly policies by the Philippines government will create huge opportunities and incentives for Malaysian companies to venture and expand their presence in the country,” Mohamed says.
“Economic sectors such as construction and building materials, ICT, healthcare, hotel and tourism, banking, legal services and franchise are among those targeted for investments by Malaysian companies and I would like to take this opportunity to express my gratitude to the Philippines government for continuing to facilitate Malaysian investors in the country,” he says.
Malaysia achieved record performance with 19.4-percent growth to $412.1 billion in 2017. Exports reached $217.4 billion last year.
The trade performance helped Malaysia’s economy achieve a growth of 5.9 percent, higher than the expected target set by the government and international financial institutions.
Mohamed says the trade performance and economic growth were the results of the right and effective economic policies that have been put in place to facilitate businesses to prosper and expand both in the domestic and international markets.
“In the context of our regional and bilateral trade, Asean accounts for the largest export market with 29 percent of our global exports going into the region. The Philippines remains an important market and trading partner for Malaysia’s export,” he says.
Malaysian exports to the Philippines grew 21.2 percent in 2017 to $3.85 billion while bilateral trade also grew 26.1 percent to $5.94 billion.
“One of the areas that we should focus on and develop strategies to expand bilateral trade is on e-commerce. Asean is among the biggest e-commerce adopters in the region but online sales in the region are still very low as compared to other global markets such as China, USA and Europe,” Mohamed says.
Data from A.T. Kearney show that online sales in Asean only account for about 2 percent of global e-commerce transactions but the potential of growth is very huge as more online users, especially the young population, are getting on board and will be the key drivers for e-commerce in the future.
Malaysia has established a strategic alliance with Alibaba to develop the world’s first Digital Free Trade Zone to facilitate and bring more SMEs into exporting their products and services in the global markets.
DFTZ will provide physical and virtual zones to facilitate SMEs to capitalize on the convergence of exponential growth of the internet economy and cross-border e-commerce activities.
“Under Asean, we have developed a masterplan on Asean ICT and connectivity to support the e-commerce ecosystem and infrastructure. We are also in the process of finalizing the Asean Agreement on E-commerce which will further streamline regulations to promote greater digital connectivity and lower operating barriers to entry for businesses in Asean,” Mohamed says.
“I also understand that the Philippines and other Asean countries have developed their own digital strategies and e-commerce roadmap and as such, the private sector particularly the SMEs in Asean should be assisted and urged to adopt e-commerce in their exporting strategy,” he says.
The Malaysian official acknowledges the immense potential for Malaysia and the Philippines bilateral trade and investment relations to expand in view of the greater economic integration under AEC and the strong growth on economic potential in both countries.
The Philippines is also bullish to bring out the country’s best brands out to Malaysia and the rest of the world, in support of big and small Filipino entrepreneurs, with special emphasis on increasing Halal certification for most Philippine products and brands.
Trade Secretary Ramon Lopez says Halal certification will open up a larger market for Filipino enterprises that are going overseas.
“There’s a bigger market out there if we intensify our campaign to have as many industries, companies and products to go for Halal certification. The global market for Halal products and services is at $3.3 trillion and where we’re at, we’re not even close to scratching the surface,” Lopez says.
Lopez says the government is optimistic that more Filipino companies will soon have their presence in the mainstream Malaysian market on top of the big Filipino brands Petron Corp., San Miguel Corp. and Universal Robina Corp.
“We want more exposure. We continue to participate in Malaysia International Halal Showcase because this venue really promotes Philippine Halal-certified products. And if we are successful in this, we expect more and more products to be Halal-certified,” Lopez says.