India-Philippines trade can bloom as island nation's growth crosses 6%

As the Philippines registered a growth rate of 6.2 per cent, Indian businesses can look at the island nation as a major opportunity to expand their trade. The Philippines economy has shown an upward trend for the last three quarters. In the first quarter, the Gross Domestic Product grew at 5.2 per cent while Q2 growth rate clocked at 5.5 per cent.

Main drivers of growth

According to the Philippine Statistics Authority, trade and repair of motor vehicles, personal and household goods, construction, and financial intermediation were the main drivers of growth for the quarter.

“The services sector posted the fastest growth with 6.9 per cent; followed by industry with 5.6 per cent; and agriculture, hunting, forestry, and fishing with 3.1 per cent,” said the agency.

Presidential spokesman Salvador Panelo, in a statement, said that the current GDP “puts the Philippines ahead of India, Indonesia and even China”. 

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To aim for a bigger role

India, currently holding the 15th position among trading partners of the Philippines, can aim to play a bigger role in one of the fastest-growing economies in the world. India has a decent trade surplus with the Philippines as it exports $1.74 billion while imports $581 million worth of goods from the island nation. Focus on ‘Act East’ policy can give a major boost to Indian businesses in the Philippines. India’s refusal to join the Regional Comprehensive Economic Partnership (RCEP) citing concerns for Indian farmers, MSMEs and dairy sector can drive the country for strong bilateral trade relations.

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Scope to enhance partnership

President Ram Nath Kovind, on his recent visit to the Philippines, emphasized ‘Make in India’ and ‘Build, Build, Build’ program of India and the Philippines respectively.

“In recent years, we have seen two-way investment grow in infrastructure and energy sectors. More prospects wait to be converted into concrete projects, from airport terminals, LNG pipelines to waste management solutions,” said President Kovind at the India-Philippines business conclave.

“There is scope to enhance partnership in several other areas - from trade, investment, services, agriculture, engineering to new technologies,” he added.

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(With inputs from ANI)