The relationship between the Philippines and New Zealand is strengthening. Recently it has become more substantial, due to an increase in trade flows and migration.
The Philippines is New Zealand’s third largest market for dairy products and the country’s forest and meat market is also significant.
The country’s economy is developing and growing steadily. The Philippines has recovered from the global recession by performing better than its regional neighbours, despite the negative effect the recession has had on its export industry.
In 2010, the country’s real GDP increased by 7.6 percent, which was the highest in more than 30 years. The main drivers of the country’s recovery were the agro-business, tourism and electronics industries.
The growth is expected to slow in 2012, as increased government spending is not expected to compensate weakening demand from its major export partners such as Japan, the United States and China.
Opportunities
The following sectors present opportunities for New Zealand exporters:
- Food and beverage: The Philippines is New Zealand’s 10th largest food and beverage export destination, with exports totalling US$502 million in 2011. There are opportunities for healthier packaged food products such as vegetarian, seafood-based, and all natural products. There is an increased demand for packaged food products that ease meal preparation.
- Wood, building and interiors: The Philippines has a shortage of local resources, which creates opportunities for New Zealand timber and wood products. In addition, the construction and furniture manufacturing sectors, which are known users of timber and wood, are experiencing a steady growth.
- Information and Communication Technology (ICT): The ICT sector continues to be one of the most promising sectors in the Philippines. The growing adoption of cloud computing provides a new phase of demand in the ICT market. Cloud computing is becoming the way to go for some small to medium enterprises and multinational corporations.
- Education: The Philippines is a steady market for education and is expected to grow. There are opportunities for New Zealand business to provide educational courses on health, business, ICT, engineering, environmental studies, hospitality and tourism, as many Filipinos relate these courses to good jobs.
- Aviation: There is a shortage of qualified support personnel such as commercial pilots and aircraft maintenance technicians in the market. Aviation training and services is in great demand among the major local airline companies.
- Infrastructure: The government listed 17 priority public-private partnership (PPP) projects, which includes airports, roads, highways, school buildings, hospitals, agricultural facilities, light rail system, and water utilities.
- Consumer retail: The Philippines’ retail sector continues to be attractive to both local and international players, due to the recent liberalisation of the retail sector.
Challenges
- The economy in the Philippines is expected to slow in 2012, as increased government spending is not expected to compensate weakening demand from the major export partners such as Japan, the United States and China.
- The Philippines is attracting one of the smallest amounts of foreign direct investments among the Southeast Asian economies, due to poor perceptions about the country’s investment climate.
