The Philippines and Russia are set to form the Russian-Philippine Business Council (RPBC), in a bid to boost trade and economic ties.
In a statement, proponents of the RPBC said representatives of the two countries had signed a memorandum of agreement that will pave the way for the creation of the council.
“This strategic alliance will work hard for the business and trade development between Russia and the Philippines,” Armi Lopez Garcia, honorary consul of the Russian Federation in the Philippines, said in the statement.
Under the agreement between the two countries, promotion of trade and other business opportunities, such as tourism and investments, will be undertaken.
“The RPBC will assist in the development and strengthening of mutually advantageous bilateral economic relations to businesses giving primary attention to medium-sized businesses,” said George Petrov, vice president of the Russian Federation’s commercial and trade department.
So far this year, bilateral trade between the Philippines and Russia stands at over $713 million. The figure is expected to hit a record of over $1 billion by the end of this year.
Major export products from the Philippines to Russia include aircraft parts, coconut, carrageenan, lighters, personal care products and banana chips.
The strengthening of the trade and economic ties between the two is expected to also boost Philippine exports of car parts, and processed and frozen food items to Russia.
The Philippines and Russia have had diplomatic relations for 35 years.
Proponents of the trade and economic deal between the Philippines and Russia deem it to be timely given weakening exports of the Philippines and other emerging markets to Europe because of the debt crisis in the Euro zone.
They expect the stronger ties between the Philippines and Russia to widen the market for Philippine-made goods.
Trade officials said efforts to expand offshore markets for Philippine-made goods are necessary to counter the ill effects of the global turmoil on the country’s export earnings and overall domestic economy.
Besides expanding markets, such as through trade deals, officials said it was also necessary to diversify export products.
The country’s major export product is electronics. In particular, the country exports intermediate electronics goods used for the production of consumer electronics, such as mobile phones and computers.
Economists said efforts to sell more export products other than electronics is prudent given the currently anemic global demand for electronics products.
They said that in tough economic times, non-essentials such as electronics naturally suffer from decline in demand, unlike the essentials such as food.