THE Philippines should develop a policy to look farther east, toward South Asia, to strengthen partnerships and economic cooperation. This seems prudent as tensions rise in the South China Sea because of territorial disputes between China and its neighbors and the competition between that rising power and the United States.
Because of those factors, several countries are looking to “de-risk” their relations with China. In a way, de-risking sounds like diversifying or becoming less reliant on a particular country. Because of the disruption brought about by the war in Ukraine, Western Europe is looking to protect its economy from the impact of deteriorating relations with Russia.
The Philippines should consider doing something similar, not just with China but perhaps also with the US. Both are currently the top trading partners of the Philippines.
The point here is not to reduce ties with those superpowers. That would be impractical, perhaps even damaging to stability in the region. Instead, the Philippines should develop economic partnerships with other countries faster and reduce reliance on China and the US.
A good place to start looking is India, which is in the news lately because it is poised to overtake China as the most populous country in the world. More significantly, India seems on track to be the third-largest economy in the world after China and the US, according to Morgan Stanley and S&P Global.
This year, India's economy is predicted to grow at 5.4 percent and even faster next year at 6.3 percent, according to the International Monetary Fund (IMF).
Those figures may seem modest, but the growth outlook for the world economy is low, partly because of the war in Europe. Still, those projections make India one of the fast-growing economies this year.
In comparison, the IMF sees the Philippines growing at 5 percent this year. And for China, the forecast is 5.2 percent for the year.
The good news is that India seems keen on strengthening relations with the Philippines, along with others in Southeast Asia. The Indian Embassy in Manila, in fact, was reportedly looking to propose a preferential trade agreement with the Philippines, and it hopes to move quickly, according to a media report. The report said India forged a similar pact with the United Arab Emirates in just three months.
Right now, India enjoys a large trade surplus with the Philippines. That is not necessarily bad, given that affordable medicines are among its top exports. But the Philippines should strive to sell more goods to India's 1.4 billion population.
The Philippines should also promote this country to Indian investors.
Their investments in the Philippines total only $900 million, focused on a few areas that include textiles, chemicals and pharmaceuticals. India has about $2 billion-worth of investments across Southeast Asia. And lately, there are also interests among Indian firms to invest in renewable energy.
To help bolster trade and investments, the Philippines should ratify the new air agreement with India soon. There was an agreement in place since 1949, but that was updated and signed by the two countries in 2018. Unfortunately, the Philippine Senate is yet to ratify the new air agreement. Meanwhile, there are no direct air links between the Philippines and India.
Establishing direct air links will not only favor trade, as that will lower the cost of shipping goods. Direct connections to India can also boost tourism, with its 7.1 million outbound travelers per year, as well as foreign students for local colleges and universities. To capture more of those markets, the Philippines should review its visa policies.
Direct flights to India will also create more options for Filipinos bound for the Middle East. Of course, travelers will prefer direct connections, but price-sensitive passengers may not mind a stop along the way.
Besides, more competition in that air route could drive down ticket prices and improve services.
As good as the prospects sound, the Philippines should also consider other countries to effectively de-risk ties with its traditional partners.
But few might be as ready and as willing as India.
Credit belongs to : www.manilatimes.net