National flags are placed outside a room in Beijing, China, Jan. 23, 2017. (File photo by DAMIR SAGOLJ / Reuters)
MANILA, Philippines — The Philippines is missing out on billions of dollars worth of investments from China due to the recent diplomatic tension between the two countries, with many companies from the East Asian giant unable to commit due to uncertainties arising from the maritime conflict in the South China Sea (SCS).
This was according to Cecilio Pedro, president of the Federation of Filipino-Chinese Chambers of Commerce and Industry Inc., who said that he had talked to hundreds of these investors who expressed their reluctance to do business in the Philippines.
“The problem with the big companies is that they don’t want to invest until they are clear what is the relations between China and the Philippines moving forward. If the picture is not clear, they will not come,” Pedro told reporters during a recent interview.
“To bring money in, they want to make sure that in the next five to 10 years we have a clear direction,” he added.
Pedro did not name the Chinese companies but said these were present across several industries, mentioning in particular exports, energy, and manufacturing.
Export market
China is the Philippines’ third biggest export market, accounting for 13.3 percent or $821.53 million of total shipments in December 2023, according to data from the Philippine Statistics Authority.
It was also the top source of goods by the country, comprising 25.1 percent or $2.72 billion of total Philippine imports during the same month.
Tensions have recently flared up again between the Philippines and China due to their overlapping claims in the South China Sea, areas believed to be rich in mineral, gas, and oil deposits.
Relations between the two had also taken a hit following President Marcos’ recent congratulatory message to Taiwan’s new president Lai Ching-te, a gesture that was heavily viewed as negative by Beijing.
The East Asian country considers Taiwan a breakaway province, with plans to eventually take it under control even through armed means.