CHINESE investors have made a purchasing order for $1.7 billion worth of Philippine products, a much bigger order from earlier estimates in light of a surge in business interest.
Chinese Ambassador to the Philippines Zhao Jianhua said Wednesday that their government encouraged Chinese firms to buy Philippine products following warmer ties between both countries under the Duterte administration.
The amount, which will cover agricultural, mineral and chemical products, has ballooned since last week when it was reported to be $1 billion (Bt35 billion) for agricultural products alone.
“Just a few days ago, I was told that the signing ceremony would [involve] about $1 billion. But in five days, the total number has gone up to $1.7 billion,” he said during the signing ceremony.
“I can assure [Trade] Secretary [Ramon] Lopez that this is the first time that the Chinese side has encouraged businessmen to place a purchasing order for such a great amount. This is the first time among Asean members,” he added.
Eighteen Chinese firms signed the purchase agreement, a copy of the list showed, a development which Lopez described as a “concrete harvest for both sides with the private sector taking the lead role.”
According to the list, the purchase covers a range of products including coconut oil, banana, pineapple, mango, nickel and copper.
The purchase agreement comes more than a week after the 28th Philippines-China Joint Commission on Economic and Trade Cooperation (JCETC) meeting, the first after a five-year hiatus as tensions escalated over the West Philippine Sea territorial dispute.
The Chinese envoy said the purchase agreement was part of their government’s efforts to balance trade between both countries, noting the trade surplus in favor of China.
“We want to balance it so the Chinese market is wide open for Philippine products and the demand is insatiable, so we have to produce more for exports to China,” he told reporters at the sidelines of the event.
He said that this would be first among many similar agreements in the future. When asked for the schedule of the $1.7-billion payment, he said he expected some to be settled by the second half this year, then completing the purchase largely next year.
Apart from this agreement, he said that China had already bought $100 million worth of Philippine fruits since President Duterte’s visit to the once estranged ally in late October.
Data from the Philippine Statistics Authority (PSA) showed that the Philippines imported more Chinese products last year as opposed to its exports to the mainland. For the whole of 2016, China was the Philippines’ top import source amounting to $14.99 billion, up by 30.7 per cent from $11.47 billion a year ago.
On the other hand, China ranked as the country’s fourth top export destination, with merchandise deliveries in 2016 ending nearly flat at $6.19 billion from $6.17 billion a year earlier.