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28 July 2018

By Roderick Abad

Published also in Business Mirror

FOR local products to penetrate Canada even further, the Philippines needs to improve its trade relation with this North American nation, said a top executive of a Canadian business group in the country.

“Historically, the Philippines has [significantly] traded with Europe, the United States and other Asian countries. [But] it has not traded a huge amount with Canada,” Canadian Chamber of Commerce of the Philippines (CanCham) President and CEO Julian H. Payne told the BusinessMirror at the sideline of “Opportunities for Philippine Exports to Canada” Forum held at the Dusit Thani Hotel in Makati on July 19.

He attributed this mainly to the fact that there is no free-trade agreement (FTA) reached yet between the two nations.

“If there’s an FTA that includes both Canada and the Philippines, it would be great,” he said, citing it as a way for an exchange of more goods in both countries.

Payne noted, though, the ongoing discussion for a possible FTA between Canada and the Asean from which the Philippines, as a member, could benefit from.

The high-ranking official of CanCham also pointed out the Trans-Pacific Partnership signed by 11 countries, excluding the US.

“If the Philippines would have become a part of that, that again would open up more trade opportunities,” he said.

Based on the recent CanCham study, the Philippines was just the seventh Asean exporting  country to Canada from 2014 to 2016, with an average value of $559 million, or 7.62 percent of the total $7.3-billion export cost of the region.

Vietnam outdid its peers, with $2.4 billion or a share of 32.41 percent. It was followed by Thailand, $1.4 billion, 18.99 percent; Singapore, $823 million, 11.19 percent; Malaysia, $766 million, 10.43 percent; Indonesia, $736 million, 10.02 percent; and Cambodia, $575 million, 7.83 percent.

Trailing behind the Philippines were Brunei Darussalam, $82 million, 1.12 percent; Myanmar, $15 million, 0.2 percent; and Lao PDR, $12 million, 0.1 percent.

The  top 10 Asean export products to Canada were electrical and electronic equipment, $1.5 billion, 6.9 percent; articles of apparels, $892 million, 4 percent; nuclear reactors or boilers, $599 million, 2.7 percent; articles of apparel or clothing (excluding knitted), $425 million, 1.9 percent; rubber, $349 million, 1.5 percent; footwear, gaiters and the like, $334 million, 1.5 percent; meat of fish or crustaceans, $309 million, 1.4 percent; furniture, $275 million, 1.1 percent; fish or crustaceans, $244 million, 1.1 percent; and optical or photographic materials, $168 million, 0.8 percent.

The leading Philippine-made products exported to Canada were electrical or electronic equipment at $328 million; articles of apparel (not knit or crocheted), $25.9 million; articles of apparel, $23.8 million; vegetable, fruit and nut food preparations, $21.6 million; edible fruits, nuts, peel of citrus and melon, $21.3 million; animal and vegetable fats and oils, $20.6 million; optical, photo, technical and medical apparatus, $11.2 million; machinery, nuclear reactors and boilers, $9.2 million; articles of leather, $8.8 million; and rubber products, $0.88 million.

“Right now, the Philippines does actually export more to Canada than Canada exports to the Philippines,” Payne said.

While there was a decline during the three-year period in review, he emphasized it turned around and started to increase again in 2017.

“I don’t have the figures right in my hand, but I know that the trend was slightly reversed,” he said of their bullish expectation on the results of their planned data gathering with regards the exportation of Philippine produced goods to Canada last year.

“The demand is there. It depends on the competitiveness of Philippine exports and relative to the other competing countries, which include the Asean countries and, of course, other tropical countries from South America and Central America which export to Canada with similar products like bananas,” he added.

To cope up with the competition, the CanCham president and CEO suggested that Filipino exporters should improve logistics, like having direct container services from here to Canada.

Payne also recommended them to leverage on the growing population of Filipino immigrants or workers there, which to date is around 800,000.

“You can serve to other parts; there’s nothing wrong with that. And if you have an interest, please try. But look for big established markets, with significant population and significant imports,” he said, citing Southern Ontario, Vancouver, Winnipeg, Manitoba, Alberta and Calgary as potential export markets.

“There’s a lot of opportunities there. What you have to identify first is what is the demand in Canada. That means looking at Canadian global imports. Second, look at where the Philippines has been successful in exporting to Canada because, with a few exceptions, you’re only catching a bit of the Canadian market, so obviously there is hope for more. The third is to look at where Asean is successful in exporting to Canada of items the Philippines actually produces. So that means, they’re doing better than you, and you should be able to do it,” he said.

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