AMBASSADOR Gijsbert Anton Boon von Ochssee—The Netherlands ambassador to the Philippines—believes Manila is ready for business with the European Union. “International business is..where the Philippines belongs,” von Ochssee told reporters during a trade conference in Cebu last month. Von Ochssée said that among the areas of cooperation that can be discussed between the EU and the Philippines includes the economy, environment and social approaches, which are important to the business community.
“If you look at the Philippines by its growing population (and) growing business, you have to be more mindful about the environment, more mindful about the social aspects,” von Ochssée said. Dutch firms, in particular, have also expressed keen interest in taking advantage of the collaboration opportunities with local companies, specifically in the fields of energy, agriculture, water, and water management. The Netherlands and the Philippines can boost knowledge and technology exchange to expand partnership, von Ochssée added.
The Philippine government has been pursuing efforts that would allow it to strategically position itself to further boost trade and investments with Europe. These efforts include moves to start negotiating for free trade agreements with the EU and the European Free Trade Association (EFTA) and to apply for qualification under the European Union’s new Generalized System of Preferences (GSP) scheme or GSP+.
Data from the EU showed that EU-Philippines trade declined by 4 percent to 9.9 billion euros in 2012, due partly to global slowdown in the electronics sector. At 9.9 billion euros, however, EU-Philippines trade is nearly back to its pre-crisis level in 2007, according to the EU. In terms of bilateral trade in 2012 between the 27 EU member states with the Philippines, three out of the Philippines’ six main EU trade partners (namely Germany, Netherlands, France, UK, Italy and Belgium) registered trade surpluses, while 17 registered trade deficits.
In terms of foreign direct investments, the EU remains the largest investment partner of the Philippines with its total stock of investments rising further to 7.6 billion euros as of end-2011. The EU is also the fifth largest host of land-based migrant Filipinos and remains the largest employer of Filipino seafarers. Filipino migrants living and working in the EU as well as Filipino seafarers manning European ships, together sent US$2.8 billion (2 billion EUR) to the Philippines in 2012, making the EU the second largest source of remittances to the Philippines.
Also, the EU remained the fifth largest source of tourists to the Philippines in 2012, with the number of EU tourists reaching a record 349,000 and an increase of 10 percent in 2012, EU data further showed.
Trade and Investments Relations
The Netherlands has always been an important trading partner for the Philippines since formal relations were established between the two countries in 1958. In 2011, the Netherlands continued to be the top EU export market for the Philippines accounting for 3.6% of total exports (US$1.7 billion). Main exports include electronics and semiconductors, processed food, animal and vegetable fats, and clothing.
The Netherlands is also a consistent top source of the Philippines’ foreign direct investment (FDI). During the last 15 years, the Netherlands has been the third largest foreign investor to the Philippines (after Japan and US). Also, to date there are at least 130 Dutch companies established and represented in the Philippines.
Transport and Logistics
The Netherlands and the Philippines have strong and long-standing bilateral relations and economic cooperation in the maritime sector. The Philippines, crewing capital of the world, is the primary source of seafarers for the Dutch fleet (currently employing more than 10.000 Filipino seafarers).
In the framework of international agreements on maritime cooperation, a bilateral treaty between the Netherlands and the Philippines on the recognition of seafarers certificates, both governments annually hold the Joint Committee on Maritime Affairs (JCMA). Furthermore, the joint venture between the Royal Association of Netherlands Ship-owners (KVNR), the Shipping and Transport College in Rotterdam (STC) and the Palompon Institute of Technology (PIT wherein the KVNR provides the nautical academy support in terms of maritime training programs (officer level).
In terms of logistics, opportunities have been identified in upcoming projects relating to the bulk handling and logistics support facilities for agri-food commodities and fisheries products. The Philippines is also developing airport facilities to be a international gateway in terms of air shipping-cargoes with domestic and international flights. The Philippines’ strategic location makes it an ideal hub for logistic service providers in Asia as capital cities in Japan, Korea, China, Singapore, Taiwan, Thailand and Indonesia are all reachable within four hours by plane from Manila.
Agriculture and Food
During the trade and investments seminar conducted in The Hague, The Netherlands last September, Filipino economists and business leaders led by Antonio Villegas and Alaska Milk CEO Wilfred Uytengsu, Jr. encouraged Dutch businessmen to take advantage of business opportunities in the Philippines in the food and agriculture sector. The agri-business sector (agro-processing and agricultural inputs manufacturing and trading) remains a leading sector in the Philippines and continues to be an important source for the country’s Gross Domestic Product (GDP) growth.
The Netherlands is also the Philippines’ largest market of crude and refined coconut oil as well as the 4th largest market for pineapple and pineapple products. Exports from the Netherlands to the Philippines consist of meat and poultry products, agricultural inputs (i.e. veterinary and animal health products), animal feeds and other food products (processed food, fruits and vegetables, dairy). With food-security being an issue and growing demands of the domestic agri-business sector, the Embassy will focus on niche opportunities for Dutch companies.
Presently, there are about 70 Netherlands-based agricultural companies with representative offices in the Philippines.
While some engage primarily in wholesale or retail of agricultural goods, some companies have expanded to offering added value services such as technology transfer activities in the areas of livestock artificial insemination, plant and/or seedling development and dairy farming.
To further promote and strengthen economic relations, the following Dutch trade instruments are also offered in the Philippines:
Matchmaking Facility (MMF) – The MMF assists local businesses particularly small and medium enterprises (SMEs) in developing countries to establish joint business relations (investment, trade or knowledge transfer) with Dutch companies. Application for MMF should be made and submitted by the local company to the Netherlands Embassy for initial evaluation.
Private Sector Investment Programme (PSI) – PSI programme supports innovative investments in emerging markets to stimulate private sector development, create employment opportunities and contribute to economic growth. Investments and application need to be done by Dutch companies in cooperation with a local partner. The Facility for Infrastructure Development (ORIO) – ORIO is a grant facility intended to contribute to the development, implementation, operation and maintenance of public infrastructure in developing countries. Applications should be made by the central government, local governments or public enterprises and submitted through the National Economic Development Authority (NEDA).
The Sustainable Water Fund (FDW) – is a Public Private Partnership facility which aims to finance projects in the area of water safety and water security. The projects should lead to poverty alleviation, sustainable economic growth and self-reliance.
The Philippines also benefits from the services and expertise of the following Dutch trade support organizations: Center for the Promotion of Imports from Developing Countries (CBI) – CBI assists local companies in exploring export opportunities in the Netherlands and Europe.
CBI sends technical consultants to the Philippines to provide training to small and medium business enterprises. The Philippines Exporters Confederation Inc. or Philexport is the local partner of CBI in the Philippines. Senior Experts Programme (PUM) – sends experienced Dutch senior managers to the Philippines to provide on-site advice on sales and marketing, administration, capacity building among others to entrepreneurs in developing countries. PUM representative offices are located in Cagayan de Oro, Cebu and Davao.
After super typhoon Yolanda struck the Visayas, The Netherlands was also one of the first countries to come to the aid of the Philippines. Dutch Humanitarian NGOs were able to collect a total Php1.5 billion (25 million EUR) for Yolanda victims in the Philippines–in addition to Dutch government contribution of Php350 million (6 million EUR). A national action for public fundraising for humanitarian assistance to the Philippines has resulted in a contribution of 25 million EUR. From early morning until midnight all Dutch broadcasting companies have cooperated to inform the public about the catastrophe that was caused by Typhoon Yolanda and to call for funds.
Dutch citizens have donated en masse for the victims of Yolanda. Through events and activities involving national politicians, DJ’s, singers, actors, TV personalities, sportsmen, artists and others, as well as hundreds of volunteers, funds have been raised by the Cooperating Aid Agencies (SHO). SHO is a partnership of Dutch aid organizations that collectively raise funds for aid to the victims of major humanitarian disasters.