The Philippines will have a better chance of success in pursuing sectoral free trade deals, particularly in minerals, rather than a full-scale bilateral free trade agreement (FTA) with the United States, US Commerce Secretary Wilbur Ross said.
Philippine Ambassador to the US Jose Manuel Romualdez told reporters in a briefing hosted by the US-Philippines Society in Makati City on Tuesday he and Ross discussed trade relations between Washington and Manila in a meeting the other week.
“We do have a chance, but it has to be sectoral, it cannot be the entire FTA,” Romualdez said.
As things stand now, the Philippines is set to pursue a Critical Minerals Agreement (CMA) with the US, alongside a sectoral FTA, the ambassador said.
What the US official presented during the meeting was an opportunity for the Philippines to wend its way toward economic independence, he added.
In April last year, the Department of Trade and Industry said the Philippines was interested in a minerals agreement with the US, or alternatively for the Philippines to accede to the US-Japan CMA, for a trilateral agreement on critical minerals.
Included in the list of critical minerals are cobalt, graphite, lithium, manganese and nickel.
Romualdez said the Philippines, which is rich in these minerals, will “get better prices” if these minerals are processed in the country.
“Right now, 90 percent of our minerals are exported. China buys by wholesale and even dictates prices,” the ambassador said.
“It’s time we [said] we are economically stronger. We have to make our economy strong enough to withstand pressure. This is the only way we can survive,” Romualdez added.
It is also possible for the Philippines to jump at the opportunity of receiving investment from semiconductor companies that are moving out of China to the US or its trusted allies, the ambassador said.
Many American companies operating in the Philippines have been pushing for a free trade deal with the US, particularly producers of leather goods to lower their export costs, he said.
Asked about the trade sanctions China might be facing from President Donald Trump’s administration, Romualdez made it clear that “this is an opportunity for the Philippines to do more with the US.”
Even if the Philippines stands to gain economic benefits by pursuing good relations with China, he said there is the pressing matter of the territorial dispute with the world’s second largest economy after the US.
“While we want to have good economic relations with China, the main issue with us continues to be the WPS (West Philippine Sea). We just have to face up to that reality,” Romualdez said.
Malaya Business Insight reported on February 10, quoting President Ferdinand Marcos Jr., that the Philippines would continue to defend its territorial sovereignty and rights over the country’s exclusive economic zone, which Beijing is claiming to be theirs.
Despite the territorial dispute with China, the Philippines will definitely maintain economic relationship with China, Romualdez said.
“There’s no question about that, especially now when it comes to climate change. China has developed alternative (sources of) energy, we have no choice but to work with them and other countries as well on climate change,” he said.
Since the US has withdrawn from the Paris climate accord, the Philippines has been affected by that move.
The Marcos administration believes that the Philippines must continue pursuing alternative sources of energy for its own survival, the ambassador said.
“If there is an alternative for us … of course, we would like to do it with allies like the United States, but it doesn’t mean that if China has a trade war with the US that we move in that direction,” Romualdez added.
