PH moves to narrow $5.5-billion trade deficit with Indonesia

The Philippines is moving to bridge a $5.5-billion trade gap with Indonesia by exporting more agricultural products and automobile parts to its southern neighbor.

Trade Secretary Ramon Lopez discussed trade opportunities with his Indonesia’s Minister of Trade Enggartiasto Lukita at the sidelines of the 34th Asean Summit on June 21 to 24.

The two ministers agreed to organize a business matching session in Indonesia in August or September 2019 to connect Filipino and Indonesian manufacturers and distributors.

“President Rodrigo Duterte is pushing for the Philippines to narrow its trade imbalance with Indonesia. Thus we hope that openness from both countries will result in a mutually beneficial trade relationship between the two countries,” said Lopez.

Indonesia was the Philippines’ 9th major trading partner in 2018, with trade reaching $7.27 billion, but there was a great disparity of value between exports and imports. 

Data showed that while Philippine imports from Indonesia reached $6.40 billion last year, Philippine exports was only $866.20 million.

Indonesian company PT Mayora said it started importing desiccated coconuts from the Philippines since April 2019.  Indonesian companies said they were willing to import shallots, bananas and alcoholic beverages from the Philippines.

Lopez said that Toyota Fortuner, manufactured in Indonesia, is one of the top vehicle imports of the Philippines.

He proposed that Indonesia source some of its automobile parts from the Philippines to manufacture the said vehicle. 

Another proposal to increase Philippine exports to  Indonesia was to export Mitsubishi Mirage G4 and Toyota Vios as soon once the Philippines became the regional production hub for these vehicles.

The trade ministers also discussed the special safeguards on Philippines coffee imports issued through Department Order No. 6 by the Department of Agriculture in March 2018. 

The low import cost and retail price of Indonesian coffee brand Kopiko had led to higher imports affecting Filipino coffee manufacturers. 

Lopez said the Philippines appreciated Indonesia’s show of good faith and efforts to enhance trade relations, as well as Kopiko’s commitment to put up a coffee processing plant in the Philippines. 

The Trade Department said it would positively consider this input in reviewing the SSG on coffee.