New Delhi: Interacting with the FICCI members today, Philippine Secretary for Foreign Affairs Enrique Manalo today mentioned that bilateral Preferential Trade Agreement (PTA) with India is under discussion and Philippines is keen to deepen engagement with Indian businesses in a number of areas like automotive, battery, value added IT & ITES services, pharmaceuticals, health, agriculture and many more.
In particular, Philippines side invited India to source nickel from it that is used for battery manufacturing. This was part of Philippines strategy to diversify away from its current 98 per cent dependence on Chinese buyers of nickel. Philippines accounts for 11% of global production of nickel and is the world’s second-largest producer of nickel in 2023. In his address to Indian business leaders, Secretary Manalo emphasised the strategic importance of developing the Philippines’ nickel sector with Indian participation. “The Philippines is the world’s largest exporter of nickel ore with exports valued at approximately $1.95 billion, chiefly used in lithium-ion battery production,” he said. “Currently, nearly 98 per cent of our exports go to China, with Japan importing the remaining 2 per cent. We are quite interested to see India become a player in our nickel sector, not just for export diversification but crucially for processing and development of a value chain. India imports about $707 million worth of raw nickel from Russia, Norway, and Japan” Manalo noted, suggesting an opportunity for supply chain realignment. This represents a natural complementarity between our economies that remains largely unexploited.”
The secretary emphasised the need to accelerate negotiations on a bilateral preferential trade agreement (PTA) that has been under preliminary discussion for two years, calling it crucial to diversifying and expanding commercial relations between the two Indo-Pacific economies. Also, Philippines is undertaking major vehicle modernisation programme and invited Indian commercial vehicles to take part in the same.
“We consider India to hold significant untapped potential as a market for Philippine exports,” Manalo told the gathering of industry leaders, highlighting an untapped export potential of $577 million. “We are keen to transition from these scoping exercises to the actual negotiations of a preferential trade agreement that will certainly help drive growth upward.”
Bilateral trade between the two countries reached a historic milestone in 2024, growing 8.6 per cent year-on-year, with the balance favouring Indian exporters. India primarily supplies pharmaceuticals, automotive components, and agricultural products to the Philippines, while the Southeast Asian nation exports electronic goods, machinery, and select agricultural commodities.
The address also emphasised the Philippines’ attractiveness as an investment destination, citing its 5.8 per cent economic growth in 2024 and forecasts ranging between 6 and 8 per cent through 2028. Manalo highlighted recent regulatory reforms, including a competitive 20 per cent corporate income tax rate for registered businesses and VAT exemptions for export-oriented enterprises with 70 per cent export sales.
The investment pitch comes as bilateral trade between India and the Philippines reached approximately $3.5 billion in 2024, nearly doubling over the past few years. FICCI President, Harsha Vardhan Agarwal noted during the session that India’s pharmaceutical industry plays a significant role in the Philippine market, accounting for around 20 per cent of total Indian pharmaceutical exports to the Asian region. “While we continue to be engaged through trade and investment, I’m happy to see that engagement is diversifying into new and strategic sectors,” the FICCI President said, highlighting waste management, green mobility, and agriculture technology as promising areas for collaboration alongside the growing defence partnership marked by India’s delivery of BrahMos supersonic cruise missiles to the Philippines in April 2024.
To facilitate increased business engagement, Secretary Manalo highlighted the e-visa system already instituted for Indian travelers and business visitors. “We are meeting even as we speak to see how we can further enhance and improve the visa system specifically for India,” he revealed.
The Philippine Ambassador to India, Josel Francisco Ignacio elaborated on several visa facilitation measures, including a “fast track” process for legitimate businesses with investments in the Philippines, especially for emergency and business visits. “The e-visa allows you to get multiple entry visas for six months or one year, and we’re also trying to streamline that process,” the ambassador stated, adding that further improvements would be announced soon.