PH to Bridge Trade Gap with Indonesia Through Agri, Auto Parts Exports

BANGKOK – The Philippines (PH) is working to bridge its trade gap with Indonesia by exporting more agricultural products and automobile parts. At the sidelines of the 34th ASEAN Summit on 21-24 June, Department of Trade and Industry (DTI) Secretary Ramon Lopez discussed trade opportunities with his Indonesian counterpart, Minister of Trade Enggartiasto Lukita. The two ministers also agreed to organize a business matching session in Indonesia possibly around August or September 2019.

“President Rodrigo Duterte is pushing for the Philippines to narrow its trade imbalance with Indonesia. Thus we hope that openness from both countries will result in a mutually beneficial trade relationship between the two countries,” said Secretary Lopez. 

In 2018, Indonesia was the PH's 9th major trading partner, with around US$7.27 billion in trade. However, PH imports from Indonesia stood at US$6.40 billion, while PH exports were only at US$866.20 million.

Indonesian company PT Mayora reported that it started importing desiccated coconuts from PH since April 2019. Indonesia is also more willing to import shallots, bananas, and alcoholic beverages from PH.

Secretary Lopez noted that Toyota Fortuner, manufactured in Indonesia, is one of the top vehicle imports of PH. Hence he proposed for Indonesia to source some of its automobile parts from PH to manufacture the said vehicle. One of the long-term plans to increase PH exports was for Indonesia to import Mitsubishi Mirage G4 and Toyota Vios when PH becomes the regional production hub for these vehicles.

Likewise, they discussed the Special Safeguards (SSG) on PH coffee imports, issued through Department Order No. 6 by the Department of Agriculture in March 2018. The measure was set because the price of Indonesian coffee brand Kopiko is below the PH’s trigger price of PHP203.74 per kilo.  

The lower import price has led to higher imports affecting Filipino coffee manufacturers. Secretary Lopez said that PH appreciates Indonesia’s show of good faith and efforts to enhance trade relations, as well as Kopiko’s commitment to put up a coffee processing plant in PH. These, he said, will be positively considered in reviewing the SSG on coffee.