The terrorist attack in Marawi City, which prompted President Rodrigo Roa Duterte to declare martial law in the whole of Mindanao and compelled him to cut short his official visit to Russia, was a very unfortunate event as it happened amid the President’s latest effort to open new markets and sources of investments for the Philippines.
Businessmen generally reacted positively to the declaration of martial law, recognizing the need for quick action to stop terrorism before it establishes a foothold in the country. I hope the President will succeed in resolving the problem so as not to derail economic growth, particularly in Mindanao.
Actually, my topic in this week’s column is about President Duterte’s trip to Russia and what it means to us, now and in the long term, but I could not avoid mentioning the latest conflict in Mindanao because of its potential impact on the economy.
I believe the President’s trip to Russia, or even his earlier travel to China, does not mean that we are moving away from the United States. We’re just establishing that the US is not the only source of investments for the Philippines or the only market for our products.
Besides, it is consistent with the protectionist policies announced by US President Donald Trump even before his election.
Mexico is only now finding, because of Trump’s pronouncements, that it is necessary to move away from too much dependence on its trade relations with the US.
Trump’s repeated announcements that he would withdraw from the North American Free Trade Agreement (NAFTA) with Mexico and Canada, if he could not renegotiate for better terms, have encouraged Mexico to expand its economic ties.
News reports said the Mexican government was seeking to expand its trade and investment relations with China, and other countries in South America and the European Union.
Thus, Mexico is starting to do now what President Duterte has been doing right after his election last year, when he declared an independent foreign policy for the Philippines.
The President’s trip was cut short because of the attack launched by the Maute terrorist group in Marawi City, but some members of the Cabinet and business leaders who accompanied him remained in Russia to finish their mission to forge new agreements with the Russian government and with Russian companies.
The President instructed Foreign Affairs Secretary Alan Peter Cayetano and other officials to continue the scheduled meetings with Russian government officials and the meetings between business groups from the two countries. About 300 Filipino businessmen accompanied President Duterte to Russia.
During the meetings, Russia agreed to open its market for Philippine agricultural products, including the importation of $2.5 billion worth of fruits and other farm produce over the next 12 months.
Trade between the two countries has been described as modest: according to the Department of Foreign Affairs (DFA), bilateral trade totalled only $226 million in 2016, with Philippine exports amounting to $49 million, mainly carrageenan and seaweeds. Imports from Russia were mainly crude oil products.
The DFA did not provide numbers but said Russian investments in the Philippines were minuscule. So far, Russia has been a small market for the tourism industry, with only 28,000 tourists coming to the Philippines in 2016.
We are already seeing new deals on trade and investment between the Philippines and China as a result of President Duterte’s independent foreign policy. His trip to Russia opens up huge opportunities for Philippine industries, including export-oriented manufacturing and agriculture, and investments.
With the new relations between the Philippines and Russia and China, I think we can look at President Duterte’s independent foreign policy approach as true globalization, which means establishing economic ties with other countries regardless of their ideologies or political systems. After all, the US and other western countries also do business with Russia and China.
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