The Philippines saw a surge in Chinese investment pledges last year while it also won some, lost some in terms of trade amid tensions between the United States and China, according to the Asian Development Bank (ADB).
In a report released on Wednesday, Nov. 14, the ADB said foreign direct investments, or those that create jobs, “more than quadrupled in the Philippines.”
It noted “an influx of investments from China in the metals industry” worth at least $7.9 billion.
Greenfield, or simply new, projects and mergers and acquisitions of existing businesses by foreign companies in the Philippines in 2018 jumped 348 percent to $22.4 billion from just $5 billion in 2017, according to the ADB report.
Investments on new projects in 2018 created 53,500 new jobs, up 43.2 percent from just 37,400 jobs created in 2017, ADB said.
While the Philippines received a boost in FDI from China in 2018, it also partly benefited from the US-China trade war, the report said.
One example was the case of US imports of vehicle transmission sets from China. Some US importers started to get the items from Asian countries like the Philippines to avoid a spike in tariff in the United States on Chinese products, ADB said.
“China, on the other hand, diverted its exports to other countries” that included the Philippines, it added.
The Philippines was also among the countries that benefited from exporting soybeans, another major US export item, after American importers started buying from countries other than China.
The Philippines also got a small windfall from the diversion of US cotton exports to other countries and an increase in auto parts importation by China from other countries.
The ADB cautioned, though, that “there is no guarantee the benefits would be sustainable in the long run.”
“If uncertainties surrounding international trade persist and continue to dampen business and investment confidence, there could be a significantly negative impact on global economic growth and international trade,” ADB said./TSB