The Philippines must continue to ride on opportunities offered by its only bilateral agreement signed so far, the Philippine-Japan Economic Partnership Agreement (PJEPA), to continue to attract Japan to buy from the Philippines.
Kenichiro Koreeda of the Embassy of Japan expressed this during a review of the economic relationship between the two countries during a forum called by the Department of Trade and Industry on Doing Business in Free Trade Areas held in Pasay City.
Of the nine economic cooperation agreements Japan has hammered out with Asian countries, including India in the past few years, Koreeda said the Philippines has turned out to have the best utilization with 88.4%.
Last year, Japan imported an average US$1 billion a month from the Philippines. From January to November, Japan bought 18.44% or the bulk of Philippine exports, followed by the United States whose purchases accounted for 14.7%. China sustained its buying spree with a 12.62% share.
Senen Perlada, executive director of the Bureau of Export Trade Promotion, said Japan imports a wide range of products such as minerals, semiconductors, electronic and machinery parts, and consumer items like food and garments, making Japan a huge market for Philippine exports.
Members of the automotive industry were the biggest users of PJEPA, while usage of perks the pact provided was more diverse among Filipino exporters.
Signed in December 2008, PJEPA covers trade in goods, services, customs procedures, investments, intellectual property and mutual recognition, movement of natural persons, cooperation, competition, and improvement of the business environment.
In 2010, Japan had a 126 million consumer base; $5.46 trillion gross domestic product; and was the fourth largest importer of goods in the world, with $693 billion worth of imports.
Retail market
Meanwhile, exporters were urged to look at the expanding retail markets of the Philippines and other Asian countries that are bursting with opportunity, said Dennis Orlina, president of the Philippine Chamber of Handicraft Industries, Inc. (PCHI).
Orlina made this recommendation following release of the 2011 Global Retail Development Index (GRDI) indicating that six Asian markets, including the Philippines, were among the top 30 destinations for global retailers.
He said the data suggests that aside from the local market, exporters can set their sights on these countries as alternative markets, in addition to traditional buyers and emerging economies.
”Many developed markets have been slower to recover from the global economic downturn than emerging markets and are often over-stored and facing wary customers,” he said. “New markets offer new opportunities, as well as new challenges. Global expansion is more than knowing where to go; it is knowing when and how to do it.”
Citing GRDI results released by international management consulting firm A.T. Kearney, Orlina said the Philippines has improved its position as top emerging markets for retail development.
He said Filipinos’ purchasing power is supported by two contributing sectors giving rise to the “new” middle class: the business process outsourcing sector now employing about 350,000 Filipinos, and remittances by overseas Filipino workers.
The GRDI found that Philippine urban areas are fueling growth, with a rising number of dual-income, middle-class families and young professionals driving retail sales. Half of the country’s total retail sales is concentrated in the Manila metropolitan area.
”The Philippines, 24th last year, is expected to see retail sales grow from $39 billion in 2011 to $42 billion by 2015, thanks to an expanding urban population and rising consumer spending fueling growth in organized retail,” the report noted.
Other Asian emerging countries ideal for retail development are India, China, Indonesia, Malaysia and Vietnam. Others are the Middle East and North Africa and South American countries.
”The outlook for Southeast Asia remains bright, with increased domestic demand and exports, stabilizing retail sales and improving consumer confidence. Grocery remains the region’s most important sector, accounting for almost two-thirds of total organized retail sales,” the report added.
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