By Jose Antonio Buencamino / Commercial Counselor, Philippine Trade and Investment Center-(PTIC)-Brussels & Jeoffrey Houvenaeghel / Trade Assistant, PTIC-Brussels
IT is precisely this marked dependence on trade with European Union neighbors—all destined for relatively slow growth in the foreseeable future—that perhaps drives a small trading nation like Belgium (with a population of 11.4 million, Belgium is still smaller than Metro Manila) to look for additional opportunities elsewhere.
For sure, Belgium has serious interests in Asean’s largest market, Indonesia; and in the fastest-growing economy in the African continent, Cote d’Ivoire (Ivory Coast). This may explain Belgium’s interest in the Philippines—we are, after all, also a huge market in Asean with a potent purchasing power. With a 7.1-percent GDP growth in the third quarter of 2016, we were the fastest-growing economy in Asia for that quarter.
From 2011 to 2015 Belgium’s average trade with the EU accounted for 68 percent of its global trade. A notable trend is that Belgium is substantially exporting more to, rather than importing from, the EU. In 2015 it reached a trade surplus of €44.8 billion with EU.
Traditionally, Belgium’s top trading partners have been the Netherlands and Germany. Bilateral trade with Germany, the Netherlands and France has been gradually declining since 2012, while trade with the United Kingdom and Italy has been increasing since 2011.
Trade with Asean
IN 2015 Asean only represented a mere 2 percent of Belgium’s global two-way bilateral trade. Belgium’s top six trading partners in Asean in 2015 were Singapore (€6.8 billion), Thailand (€2.3 billion), Vietnam (€2.1 billion), Indonesia (€1.7 billion), Malaysia (€1.5 billion) and the Philippines (€560 million). Singapore alone accounted for 44.5 percent of Belgium’s total two-way bilateral trade with Asean, while the Philippines accounted for a mere 3.7 percent. For all Asean countries bilateral trade has been rising, except for Brunei Darussalam.
Trade with the Philippines
BELGIUM’S trade with the Philippines represents a minuscule proportion (0.8 percent) of its total global bilateral trade. From 2011 to 2013 trade between Belgium and the Philippines was in decline. Imports from the Philippines declined by 31 percent in 2012 and by 18 percent in 2013 while exports were stagnant in both years. We then see a significant increase in imports from the Philippines with a 19-percent growth in 2014 and 40 percent in 2015. Exports to the Philippines marginally declined in 2014, but significantly increased in 2015 by 27 percent. Overall, we see a huge percentage increase in total bilateral trade in 2015 with 32 percent compared to previous years. The total bilateral figure of 2015 of €560.3 million finally surpassed the €508.4 million registered in 2011.
Belgium has a significant annual trade surplus with the Philippines from 2011 to 2015. Belgium gained its biggest trade surplus of €115 million in 2015, which is unprecedented compared to the trade performance of the Philippines’s regional counterparts. The two other Asean countries with which Belgium has a trade surplus are Brunei and Lao PDR. Belgium has a trade deficit with the rest of the Asean countries.
An analysis of the top 20 Belgian product groups exported to the Philippines in 2010 and their performance from 2010 to 2015 show 12 product groups remained in the top 20 in 2015. Interestingly, four out of these 12 product groups are medical-related products, demonstrating the stable demand of the Philippines for these product groups. In 2014 and 2015, five product groups performed exceptionally well with strong growth rates. These were medicaments consisting of mixed or unmixed products (40 percent), vaccines for human medicine (137 percent), medicaments containing antibiotics (46 percent), cooked and frozen potatoes (57 percent)—yes, these are the famous Belgian fries!—and milk and cream in solid form (122 percent). To be continued