Philippines and Singapore Trade Relations and Agreements

Established in 1998, the Philippines-Singapore Action Plan (PSAP) is a broad-based

and comprehensive umbrella framework that covers co-operation in various areas
including trade and investment, information technology, capital market development,
education, culture, defence, and people-to-people exchanges. Under the PSAP, there are
now frequent people-to-people exchanges, joint agreements in culture, joint marketing
efforts in tourism and institutional linkages for IT cooperation.

1. What leads to said agreement?

Singapore maintains good trade links with the Philippines. The Philippines is
currently Singapore’s 12th largest trading partner, with bilateral trade totaling S$ 22.3
billion in 2010. Electronics accounts for a large proportion of bilateral trade. Singapore is
the Philippines’ 4th largest trading partner (after Japan, China and the US) and its top
trading partner in ASEAN (after Thailand, Malaysia and Indonesia).

Singapore and the Philippines enjoy warm and friendly relations. Both countries
cooperate well on a range of issues at the international and regional forums. Bilateral ties
are wide ranging, from an exceptionally strong economic relationship to a flourishing arts
and culture scene.

There is a general consensus that we can strengthen the relationship between our
two countries further. There is a growing middle-class market in the Philippines which
Singaporean companies are eager to reach out to people from the Philippines also like to
travel, both domestically and internationally and we want to improve our people-to-
people links by tapping into the growing air-travel market. Philippines and Singaporean
carriers currently provide 148 weekly passenger services and we may reach 160 weekly
 flights between the Philippines and Singapore this year. We have direct flights between
Singapore and Clark, Cebu, Davao, Iloilo, Kalibo and Manila’.

2. What are the challenges?

Philippines apparent generalized loss of international competitiveness. Decline in

real wages as adjustment tool, starting to recover while the Singapore’s global share holds
steady despite high wages and increased share in HS 85, other tech intensive products;
largest number of products gained RCA (gross and net during 2000s; second largest
number of products with RCA after Thailand.

Other challenges: Existing infrastructure need to be upgrade, new infrastructure need to

be constructed, regulatory framework need to be harmonized, technological innovation
need to be nurtured, narrow the development gaps, lack of awareness, collaboration,
exchange and outreach programme, limitations on people mobility, impediments to
movement of vehicle, goods and people across borders, inconsistent application of rules
of origin for preferential tariffs, high transaction costs due to non-tariff measures and
restrictions and impediments to inflow of investments.

3. Why do we trade with them?

The Philippines’ population is resourceful and energetic and are looking towards
the future. The Philippines contributes to Singapore’s healthcare sector, banking industry
and even animation industry. In food and beverage and retail, the Philippines is an active
regional and global contributor. In terms of trade, Singapore is the Philippines fourth
largest trading partner globally, number one in the ASEAN region and annual bilateral
trade exceeds S$15billion. In 2016, Singapore was the fifth largest foreign investor and
the largest amongst ASEAN members.
4. What are the benefits gained by both parties?

Several factors showcase that the Philippines offers great opportunities for a
foreign investor. As said the Philippines is a growing economy, and a member of ASEAN,
set in a prime location in Southeast Asia just three hours away from Singapore, and almost
one hour and a half from Hong Kong (of course in flying time). It’s an English-speaking
country, with English as official language (along with Filipino which is based on Tagalog),
as well as business language, and local Filipino workers are English-speaking on top of
being considered a new breed of world-class professionals and often referred to as global
knowledge workers. There’s a young, educated, and discerning middle class with a
growing spending power, and the country offers a low cost of doing business and an
attractive investment landscape.

A major driver for growth is the service sector, with tourism (the contribution of travel
and tourism industry to the Philippine’s GDP was 10.6% in 2015 and in line for growth),
real estate, and business process outsourcing (number one in the world) as leading
segments.
Singapore, with its leading role as business and trade hub in the ASEAN marketplace,
remains a priority market for the Philippines for exporting products and services, and
support the Lion City’s aerospace industry mainly in the MRO service (Maintenance,
Repair, and Overhaul).

Also, Singapore remains a key investment source for the Philippines in priority sectors
that among others include infrastructure, construction and public-private partnership
projects, and the tourism industry.
 5. What are the corresponding responsibilities?

The implementations of the economic and non-economic components of the

agreements must be according to the standards set on the PSAP. The secretary of Trade and
Industry of the Philippines and the minister of the Trade and Industry of Singapore has the
responsibility of overseeing that the implementations of the projects.

6. How would these agreements contribute to economic development?

Philippines-Singapore agreements contribution to economic development:

Industrial Park Development

There is considerable scope fore the Philippines and Singapore to exchange

experiences and learn the best practices from each other in setting up industrial parks
from the feasibility study and planning stage to the construction of infrastructure and
the management of such parks. The two sides could also work together to ensure the
success of joint Philippines-Singapore industrial parks and the companies located
therein.

Business Opportunities in Mindanao and Northern Luzon

The regions of Mindanao and Northern Luzon offer significant business opportunities
that companies from the Philippines and Singapore could take advantage of.

Promotion of Investments

Singapore companies are interested to invest in the Philippines. Through the

identification and development of areas of co-operation between the two countries. It is
hoped that Singapore and the Philippines can forge a close economic alliance.

Port Infrastructure and Management

 The Philippines plans to upgrade its port facilities from the infrastructure base to state-
of-the are equipment as well as the training of personnel to manage these facilities.
Singapore could contribute to such plans by sharing with the Philippines its experience in
port operations and encouraging Singapore investors and port operators to look at
opportunities in the Philippines.

Franchising

Companies in both Singapore and the Philippines have established reputable brand
names that could be marketed regionally and internationally. Singapore and the Philippines
shall work together to facilitate the business growth of these franchises in the region and
beyond.

Tourism

The Expansion of Flight Frequencies for both countries and Tourism Investments.

Productivity and Skills Training

Singapore and Philippines work very closely under the umbrella of the Asian Productivity
Organization (APO). The Productivity and Standards Board (PSB) has co-operated with the
Philippines in APO programmes such as Technical Expert Service (TES) and Bilateral Co-
operation between National Productivity Organizations (BCBN). The two countries have also
developed close ties under the Third County Training Programme (TCTP).
 Philippines - Singapore Import and Export Statistics for 2015
Import Import Product Export Export Product
Product Group (US$ Thousand) Share (%) (US$ Thousand) Share (%)

All Products 4879796.03 100 3649515.39 100

Capital goods 2771655.54 56.8 3301493.45 90.46

Consumer goods 1274147.17 26.11 196103.3 5.37

Intermediate
goods 761479.21 15.6 55121.72 1.51

Raw materials 72313.57 1.48 96753.75 2.65

Animal 24769.35 0.51 10764.91 0.29

Chemicals 370267.17 7.59 17739.49 0.49

Food Products 337628.18 6.92 43062.01 1.18

Footwear 12171.59 0.25 278.92 0.01

Fuels 627029.08 12.85 166714.42 4.57

Hides and Skins 19921.23 0.41 2138.1 0.06

Mach and Elec 2705555.1 55.44 3238442.61 88.74

Metals 83929.4 1.72 19228.09 0.53

Minerals 462.84 0.01 2946.97 0.08

Miscellaneous 110462.97 2.26 79017.6 2.17

Plastic or Rubber 271757.59 5.57 14731.2 0.4

Stone and Glass 71366.24 1.46 3873.95 0.11

Textiles and
Clothing 32514.99 0.67 5992.88 0.16

Transportation 127812.75 2.62 21895.07 0.6

Vegetable 19429.26 0.4 14316.13 0.39

Wood 64594.36 1.32 8332.19 0.23

Source: World Integrated Trade Solution

 Philippines - Singapore Import and Export Statistics for 2016
Import Import Product Export Export Product
Product Group (US$ Thousand) Share (%) (US$ Thousand) Share (%)

All Products 5596519.3 100 3700590.53 100

Capital goods 3104959.37 55.48 3437766.63 92.9

Consumer goods 1593977.51 28.48 176832.7 4.78

Intermediate
goods 863351.31 15.43 53952.18 1.46

Raw materials 34203.95 0.61 32039.02 0.87

Animal 13720.56 0.25 8974.35 0.24

Chemicals 470792.51 8.41 30836.12 0.83

Food Products 414434.57 7.41 47572.87 1.29

Footwear 8695.03 0.16 522.72 0.01

Fuels 664866.97 11.88 48940.02 1.32

Hides and Skins 23051.71 0.41 1344.46 0.04

Mach and Elec 3012616.02 53.83 3393017.37 91.69

Metals 82791.15 1.48 12182.64 0.33

Minerals 263.12 0 168.77 0

Miscellaneous 193632.8 3.46 69778.07 1.89

Plastic or Rubber 378731.26 6.77 12991.7 0.35

Stone and Glass 59231.6 1.06 3142.5 0.08

Textiles and
Clothing 21749.28 0.39 3622.33 0.1

Transportation 165309.55 2.95 27987.54 0.76

Vegetable 17809.78 0.32 11708.11 0.32

Wood 68823.39 1.23 27800.95 0.75

Source: World Integrated Trade Solution

 In 2016, Singapore ranked as the fourth largest trading partner with a total trade

amounting to $9.288 billion or a share of 6.6 percent to total trade. Total outward shipments
were valued at $3.824 billion while import payments reached $5.464 billion, translating to a trade

deficit of $1.640 billion. Electronic Products and Petroleum Products were the country’s major

exports to Singapore with earnings of $3.372 billion or 88.2 percent share and $82.80 million or
2.2 percent of the total export, respectively The bulk of inward commodities from this country

were Electronic Products with import bill of $2.481 billion or 45.4 percent share, and Mineral

Fuels, Lubricants and Related Materials worth $631.77 million or 11.6 percent share
 Total external trade in goods with ASEAN member countries for the reference period
amounted to $16.379 billion or 21.7 percent of the country’s total trade. Exports
to ASEAN member countries were valued at $4.704 billion while imports were worth $11.675
billion, generating a unfavorable balance of trade in goods (BoT-G) of $6.971
billion. Singapore was the country’s top trading partner among the ASEAN member countries
with a total trade accounting for $4.640 billion or 28.3 percent share of the ASEAN total
trade. Exports to Singapore amounted to $1.930 billion while imports payment was valued
at $2.709 billion, reflecting a trade deficit of $779.25 million
 Total external trade in goods with ASEAN member countries for 2018 amounted to

$18.21 billion or 21.5 percent of the country’s total trade. Total exports to ASEAN member

countries was valued at $5.21 billion while total imports was worth $13.00 billion, generating an

unfavorable balance of trade in goods (BoT-G) of $7.79 billion. Singapore was the country’s top

trading partner among the ASEAN member countries with a total trade accounting for $5.18

billion or 28.4 percent share to the ASEAN total trade. Exports to Singapore amounted to $2.16
billion while imports payment was valued at $3.02 billion, reflecting a trade deficit of $867.77
million.

REFERENCES:
https://www.mfa.gov.sg/content/dam/mfa/images/om/manila/MOU.pdf
https://wits.worldbank.org/CountryProfile/en/Country/PHL/Year/2016/TradeFlow/Expo
rt/Partner/SGP/Product/all-groups#
https://psa.gov.ph/content/highlights-foreign-trade-statistics-philippines-first-semester-
2017
https://www.rappler.com/newsbreak/iq/65712-in-numbers-ph-singapore-relations
https://sbr.com.sg/economy/commentary/singapore-and-philippines-more-just-
trading-partners-0