Traffic waits at a crosswalk on Roxas Boulevard, the main route along Manila Bay, in Manila, capital of the Philippines on November 20. (GT/Huang Ge)
In need of infrastructure support to boost economic growth, the Philippines is seeking cooperation with Chinese companies under the China-Proposed Belt and Road Initiative. More opportunities will be brought to the Philippines after the two countries on November 20 announced they would jointly advance the initiative during Chinese President Xi Jinping's visit. Chinese State-owned enterprises and private companies in the Philippines said although there are some challenges such as labor issues and unstable raw costs in the local markets, they are devoted to forging new business cooperation with Philippine firms given the improving local investment policies for overseas investors.
The China-proposed Belt and Road Initiative (BRI) has brought great growth opportunities for the Philippines, and local companies are enthusiastic about welcoming increased Chinese investment, though some challenges persist, Chinese business owners and experts noted.
Having been in the Philippines for more than 11 years, Ren Xiaopeng, general manager of China Road and Bridge Corp's branch office in the Philippines, has seen the evolution of China-Philippines relations. He notes that bilateral economic and trade ties have deepened during recent years.
China Road and Bridge is one of the participants and promoters of cooperation between the two nations. As one of the earliest Chinese enterprises to "go global," the company registered and established its Philippines office on August 25, 1995, Ren told the Global Times.
The enterprise is mainly engaged in construction projects including roads, bridges, airports, ports, railways, water supply and drainage and other civil engineering projects.
It has undertaken nine projects in the country and taken over two additional projects that are ongoing, Ren said.
In July, China offered to build the 734-meter long Binondo-Intramuros Bridge in Manila City and the 506-meter long Estrella-Pantaleon Bridge in Makati City that will help ease traffic congestion in Metro Manila, according to the Xinhua News Agency.
Chinese companies are enthusiastic about investing in the Philippines, and with the bilateral relations and exchanges in various fields deepening, China-Philippines cooperation under the BRI will reach a new high, according to experts.
China and the Philippines agreed on November 20 to upgrade their ties to comprehensive strategic cooperation and jointly advance Belt and Road construction, the Xinhua News Agency reported.
The decision was made at a meeting between visiting Chinese President Xi Jinping and his Philippine counterpart Rodrigo Duterte.
Xi's visit to the Philippines showcases the breadth of bilateral relations and emphasized the considerable areas of convergence the two nations have, particularly in relation to infrastructure, trade, investments, tourism, agriculture, security and law enforcement, culture and people-to-people ties, Lucio Blanco Pitlo III, Lecturer in Chinese Studies at the Ateneo de Manila University, told the Global Times on Saturday.
The Belt and Road jives with the "Build, Build, Build" (BBB) Program under the Duterte administration, Pitlo said, noting that Chinese investments in construction, real estate, online gaming and manufacturing will generate jobs and revenue for national and local governments, allow for knowledge and technology transfers, and will trigger a multiplier effect that can be extended to downstream sectors.
The Philippine Department of Finance (DOF) has assured the public of the financial sustainability of the Duterte administration's ambitious BBB program that is designed to modernize the country's infrastructure backbone by rolling out 75 flagship projects worth a combined total of $36 billion in investments, according to a government statement.
This is in keeping with the government's goal to sustain rapid growth, attract investment and attain economic inclusion for all Filipinos, the statement said, citing DOF Undersecretary Grace Karen Singson.
The rapid development of the Philippine economy has made the contradiction between its underdeveloped infrastructure and fast economic growth increasingly prominent, Ren said, noting that the country is in dire need of more infrastructure.
As the BRI is one of the largest infrastructure and investment projects in history, coinciding with the BBB program issued by the Philippine government, Philippine companies will benefit from a golden age of infrastructure development and are likely to grow at a rapid pace, according to Ren.
The two countries have conducted broad cooperation in transportation infrastructure, industrial parks and energy, and China is currently the Philippines' largest trading partner.
Trade between China and the Philippines increased 8.5 percent year-on-year to $51.28 billion, according to information released by China's Ministry of Commerce (MOFCOM) on November 15.
China's investment in the Philippines was $1.25 billion as of the end of September, and the Philippines' investment in the Chinese market reached $3.33 billion during the same period, according to MOFCOM.
The great growth potential of the Philippines also offers many opportunities for Chinese business owners.
Zhang Hua, who was born in East China's Fujian Province, has sought business opportunities in the Philippines for more than 20 years in sectors such as property and mineral products.
Chinese business owners encountered a relatively hard time in the Philippines when he first came two decades ago, due to unfavorable foreign investment policies, Zhang told the Global Times.
With the rapid growth of the country, the Philippines now welcomes foreign investment to support their infrastructure needs, and Chinese business owners have made large contributions to the Philippine economy.
The advantages brought by Chinese enterprises that expand their presence in the Philippines come from their resources, technology, quality and scale in particular, Ren said.
Chinese companies are vested in forging projects that benefit the people of the two countries under the BRI, and also aim to bring new growth opportunities and create novel cooperation opportunities for both countries, he noted.
"Although the Philippines welcomes overseas investment, it has relatively strict restrictions on foreign capital in the proportion of shares [that can be owned]," Ren said.
Other challenges that Chinese firms may face include labor problems and the fluctuating prices of raw materials charged by local suppliers, according to Zhang.
The past two years saw great strides in the relationship between the two countries despite the persistence of challenges, Pitlo said.
If the present trajectory is sustained, there is hope that deeper and expanded cooperation will benefit both economies and their peoples, he said.