Salceda: PHL should convert China’s West Philippine Sea threat to economic advantage

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Source: http://www.businessmirror.com.ph/index.php/news/top-news/7908-salceda-phl-should-convert-china-s-west-philippine-sea-threat-to-economic-advantage

LEGAZPI CITY—China’s threatening posture over territorial conflicts and  issues in the West Philippine Sea may be turned into an advantage by rival claimant neighboring countries, including the Philippines, as Japan shifts its gaze for trade and investments  “to the rising stars” of Southeast Asia.

Albay Gov. Joey Salceda said “the China scare is likely to trigger the second massive outflow of Japanese direct investments, second only to the 1987 Plaza Accord, when the Japanese yen was forced to appreciate from ¥248 to ¥78 per US dollar.”

A news wire report said Japan’s new Prime Minister Shinzo Abe is shifting the focus of his country’s investment and trade to member- states of  the Association of Southeast Asian Nations (Asean), of which the Philippines is a member-country, after a falling apart with China over territorial disputes.

Asean groups Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Salceda, an economic adviser to Philippine presidents, said the Philippines cannot afford to miss this foreign direct investment (FDI) bonanza, which could be considered “the single most important economic factor” in its horizon.

“It is the Philippines’s chance to capture at least $20 billion in Japanese manufacturing FDI in six years, the most benevolent economic and external discrete factor ever to happen in favor of the Philippines,” said Salceda, who is also a foreign economic consultant of Inchon City in South Korea.

Japan is the Philippines’s biggest trading partner, with a total trade and investments of $13 billion in the country, and its third-biggest source of tourists.

Salceda said the country was not able to optimize the benefits of the same event in 1987 due to coup-driven political instability of the post-Edsa period, and the aggressive and competitive marketing drive by Malaysia, Thailand and Indonesia.

To catch the windfall, Salceda listed two requirements: lower electricity prices and strong governance as cornerstone, with special stress on aggressive infrastructure “visioneering,” development and execution.

The news wire report said Prime Minister Abe wants Southeast Asian nations “to help counterbalance the growing economic and military might of China at a time when Japan needs new sources of growth for its languishing economy and is debating whether to make its own military more muscular.”

Abe is scheduled to visit Asean countries, many of which have conflicting claims with China over small islands in the mineral- and oil-rich South China Sea, a part of which the Philippines calls West Philippine Sea.

The Asean has a plan to integrate in 2015 into a common market, a move that will create a bloc with a combined economy worth $2 trillion and a population of 600 million. It is a significant lure for investors such as Japan, the report said.

 

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