The warmed-up relations between the Philippines and China has begun to reap benefits to the national economy.
The recent visit of Chinese Vice Premier Wang Yang resulted in the firming up of several loan packages as well as outright grants to finance badly needed infrastructure, not only in Mindanao but in Metro Manila as well. There are more lined up as soon as feasibility studies on proposed projects are completed.
This is in contrast to the situation in the last six years when icy-cold relations on account of our previous leader’s conflict with China over the West Philippine Sea, a.k.a. South China Sea prevailed.
Looking, for instance, at the table of net foreign direct investments into the Philippines last year, I noticed that Japan, the biggest source of FDI, brought in 993.1 million dollars worth of investments, followed by Hong Kong with 611.6, Singapore with 156.2, and Taiwan with 147.7 million. Germany, the USA, Spain came in next. The top ten country investors accounted for 2.255 billion dollars of new capital invested into the Philippines last year. But nowhere was the People’s Republic of China.
Compare that to the huge volume of investments we will be getting this year and the next more years from China. The way I look at it, the country’s foreign direct investments could reach 6 billion this year, and more in the coming years, and at least 75 percent of these would come from only three economies: China, Japan and Taiwan.
One especially big boost with immediate benefits to the economy is the promise to bring in at least one million tourists to visit the country from China.
This is a case where good politics will become a boost to our tourism.
We had close to 6 million visitor arrivals in 2016. There were more visitors from tiny Taiwan than huge China. Think of an increase of one million. That is a 17-percent increase in just one year. And if we build more and better infrastructure and solve the congestion in our airports, if we make our beautiful islands more accessible, Secretary Wanda Teo’s wish for 10 million tourists by 2020 will be well neigh possible.
Even in Taiwan, I note that on the basis of visa applications for the last two months alone, an increase of some 25 percent in visitor arrivals this year compared to last is very doable. And with our office and the new tourism attaché here joining hands in promoting interest in the country, we should easily achieve our targets.
Already, flights to and from Manila and Taipei have increased in frequency, with new player Air Asia inaugurating daily flights to Manila and even Cebu starting December last year. As for China, there will be direct flights from Shanghai and Guangzhou to Cebu soon, and many more from different major cities there to our other destinations such as Aklan and Palawan.
The multiplier effect of tourist spending is phenomenal. Not only the airline industry, but hotels, restaurants, taxis, souvenir shops, down the line. The other good thing about tourism as an economic driver is that even semi-skilled and minimally-schooled workers can be employed in the hospitality industry.
Political decisions can also affect tourist arrivals negatively, as in Taiwan.
Some kind of cold war now defines the cross-strait relations between China and this country. And visitor arrivals from “greater” China, or the mainland, has gone down, per news reports by at least 35 percent between 2016 and 2015.
When the relations warmed up during the previous regime, so many enterprising Taiwanese businessmen built more hotels and restaurants, as the boom required more rooms and food outlets. And even with a multiplicity of hotels, 80-percent occupancy was the norm.
But on business travellers alone, a peak of 1 million visitors in 2008 has gone down by half in 2016. The new administration has unveiled a new “Southbound” policy which aims to strengthen better economic and bilateral relations between Taiwan and mostly Asean countries. Hopefully, this would fill the gap occasioned by the China cross-strait thaw.
Those who fret about what they perceive to be soured relations between the Philippines and its previous colonial “master”, the US of A will do well to analyze the statistics. In the last five years, US investments in the country has not figured in the top sources of FDIs. And if you de-construct visitor arrivals from North America, you will note that some two-thirds of these visitors are really Fil-Ams or Fil-Canadians. While I do not discount their contribution to the economy, as visitors, they do not spend as much as the full-foreign visitors.
I always write that good economics is good politics. Similarly, shifts in political decisions and developments impact positively or negatively on a nation’s economy, particularly on tourism.
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Senator Leticia Ramos-Shahani, diplomat, statesman and nationalist passed away last Monday the 20th of March, at 2:40 in the morning in the intensive-care unit of St. Luke’s Hospital in Taguig, where she had been confined for about a month.
At the time of her demise, she was a member of the board of directors of the Manila Economic and Cultural Office (MECO), our country’s representative office in Taiwan.
Before that, she was an accomplished senator for two terms, a distinguished career foreign service officer, having been Philippine ambassador to Romania, Hungary and the then-separated East Germany (now united with the West as the Federal Republic of Germany), and to Australia as well.
She wa an Undersecretary of Foreign Affairs and served the United Nations in various high positions.
She was with MECO as director from 2001 to 2004 under President Arroyo, thence re-appointed by President Aquino from 2010 to 2016. Last July, her skills were once again harnessed by President Duterte to continue her service to the nation as a director of MECO.
Within the short period of her latest appointment, it was my privilege to have been mentored by this great lady on the nuances of the cross-strait relations and our country’s role as friends of both China and Taiwan. She has always stressed the importance of fostering stronger education and cultural ties with our neighbor to the north. In the short period that she has guided us in MECO, many of her advocacies are now seeing fruition.
She will be greatly missed. Our profound condolences to the family.