Russian Businesses Bullish on Expanding in PH — DTI Chief

MAKATI — Department of Trade and Industry (DTI) Secretary Ramon Lopez revealed that Russian businesses are keen on expanding their operations to the Philippines (PH).

During a meeting with Russian Deputy Minister of Industry and Trade Aleksey Gruzdev and delegation of Russian business executives on 25 September 2019, Sec. Lopez shared PH’s priority industries that Russia can participate in. He highlighted pharmaceutical, medical, as well as vehicle manufacturing sectors that both countries can collaborate on.

“The Philippines, under the leadership of President Rodrigo Duterte welcomes the interest of Russia to pursue economic cooperation engagements with the government and our business sector. We are optimistic that this good bilateral relationship between the two countries would drive investments, trade, and jobs,” said Sec. Lopez.

According to the trade chief, Russian businesses are exploring opportunities on various industries including airport infrastructure, aviation, shipbuilding, railways, satellite navigation system, waste water management, and power.

Deputy Minister Gruzdev expressed confidence with both countries’ strengthened business relationship and economic partnership. He likewise reiterated Russia’s openness for trade cooperation.

The meeting was held prior to President Duterte’s visit to Moscow this week, where DTI will bring over 150 business delegation to link with possible Russian counterparts. Various business agreements will also be signed during the visit. These include sale of PH canned fish and coconut products, as well as distributorship of lifestyle products and healthcare systems.

Also present during the meeting were DTI Assistant Secretary Angelo Taningco, Foreign Trade Service Corps Executive Director Magnolia Uy, Board of Investments Executive Director Ma. Corazon Dichosa, Russian Ambassador Igor Khovaev, and Ministry of Industry and Trade Deputy Director for Asia, Africa, and Latin America Aleksey Meshkov.

PH Food Exporters Showcase Products in Russia

As part of the Department of Trade and Industry - Export Marketing Bureau’s (DTI-EMB) approach in expanding Philippine exports, the Philippines will participate in an Outbound Business Matching Mission (OBMM) to Moscow, Russia on September 20 to October 01, 2019.

This mission is in collaboration with the Philippine Trade and Investment Center (PTIC) - Moscow and Department of Agriculture (DA). The OBMM is just in time for the WorldFood Moscow 2019 that will be held on September 24 - 27, 2019 at the Crocus Expo International Exhibition Center, Moscow, Russia.

The delegation will be composed of 14 Philippine food companies who will feature tropical fruits and juices, artisanal chocolates, banana chips, crackers and biscuits, virgin coconut oils and other coconut products, noodles, condiments, and fishery products.

There will be business matching sessions and market scanning. The delegates will also have a briefing with the Eurasian Economic Commission (EAEC) to inform them on the preferential tariffs provided to beneficiary countries including the Philippines. The EAEC is an economic union composed of Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia with a consumer base of over 170 million.

The OBMM will also provide opportunities for exporters of fishery products which were recently accredited by Russia to promote their products.

“We are now looking at Russia as an emerging market for Philippine exports as we take advantage of the improving trade relations of both countries,” DTI - Trade Promotions Group Undersecretary Abdulgani M. Macatoman said.

WorldFood Moscow is a recognized international food and drink exhibition in Russia which could be an entry point for international manufacturers who aim to penetrate the Russian market. The event connects thousands of businesses from around the world with Russia’s key food and drink buyers, including retail representatives from Russia’s leading supermarket chains, wholesalers, hotel-restaurant-café sector, and food manufacturers.

In 2018, Russia was the Philippines’ 21st trading partner with a total bilateral trade valued at US$1.36 billion or 0.74% of total Philippine trade with the world valued at US$182.15 billion. It is the 33rd export market valued at US$86.07 million or 0.12% share of the total Philippine exports to the world valued at US$69.31 billion and 19th import source accounting for US$1.27 billion or 1.13% share of the total Philippine imports from the world valued at US$112.84 billion.

Moreover, the exports of food products is valued at US$17.12 million in 2018. The top 3 Philippine food exports to Russia were desiccated coconuts, other fruits, nuts, and bananas, including plantains, fresh or dried.

Philippines and Russia follow through JCTEC and PV Initiatives

Department of Trade and Industry Undersecretary Ceferino S. Rodolfo and Ministry of Economic Development Deputy Minister Alexey Gruzdev met in Manila on April 19, 2018 for the co-Chairs meeting of the Philippines-Russia Joint Commission on Trade and Economic Cooperation (JCTEC). The JCTEC is a mechanism to improve bilateral economic relations between the Philippines and Russia. During the meeting, the following areas for collaboration were discussed: trade and investment promotion, industry development, labor, higher education, agriculture, energy, transport and atomic sphere and space exploration.

The co-chairs expressed that with the highest level of support from President Rodrigo Duterte and President Vladimir Putin, both sides are geared towards enhancing trade and investment relations. This is achieved through the following initiatives: trade promotion, accreditation of products for export, utilization on the the Eurasian Economic Union Generalized System of Preferences (EAEU GSP), proposal for a Free Trade Agreement (FTA), and updating of the 1992 Investment Promotion and Protection Agreement.

On trade promotion, the Philippines solicited the support of Russia for increased participation in their trade fairs and promotional activities. In this regard, the Philippines expressed its interest to participate in World Food Moscow on September and MEBEL Furniture Fair on November to showcase its food and furniture products to Russia.

To enhance trade, both sides agreed to exchange the final results of the mutual veterinary missions for the audit of Philippine seafood and seafood products and Russian meat products, once finalized. The audit was undertaken to ensure the safety of consumers against diseases and contamination from these export products. Updates on established business arrangements related to import and export of products, supply of engineering and design for steel structure, supply of automobile and trucks, and pipeline transport and construction that were initiated during the official visit to Russia of President Duterte last year were reported during the meeting. 

The Philippines sought the assistance of Russia on fully utilizing the EAEU GSP. The EAEU GSP is a unified system of tariff preferences granted by the Customs Union between Belarus, Kazakhstan and the Russian Federation. Selected products covered by this scheme that are imported from developing country beneficiaries, such as the Philippines, are eligible for a 25% discount on customs duties.

To enhance market access, the Philippines proposed to engage in dialogue the Eurasian Economic Commission (EEC), which is the regulating body responsible for the integration of the EAEU, through a proposed Memorandum on Understanding to understand the market, operations, and regulation of the EAEU.

Both sides also agreed to commence discussions to update the 1992 Investment Promotion and Protection Agreement (IPPA) as a means to attract and enhance investment relations.

The co-chairs meeting was preceded by a business round table attended by fifty-three local and Russian representatives from the following sectors: aerospace, automotive, chemicals, construction, infrastructure, food, mining, energy, oil and gas and consultancy.

Following the co-chairs meeting, the Russian delegation made a courtesy call to DTI Secretary Ramon Lopez. Deputy Minister Gruzdev shared the interest of the Russian side to further enhance trade and investment relations through the JCTEC. Secretary Lopez positively remarked that “coupled with the highest level of support from President Rodrigo Duterte and the thrust of the administration towards re-balancing our economic relations by pursuing non-traditional markets in the Asia Pacific region, the engagement of the Philippines with Russia will steadily increase.”

Undersecretary Rodolfo expressed his satisfaction on the outcomes of the meeting. He stated, “We hope to explore further the cooperation in other areas and take advantage of the complementarities between our economies in time for the 2^nd JCTEC in Moscow in the second half of 2018.”

Russia is the Philippines’ 29^th trading partner, 37^th export market, and 24^th import supplier in 2017.

*This is Press Release

Russia seeks stronger economic and military ties with Philippines

Russian Federation Ambassador Igor Khovaev on November 29 at the Pandesal Forum of 77-year-old Kamuning Bakery Café in Quezon City expressed optimism on strengthening of Philippine-Russia diplomatic, economic, military, cultural, anti-crime and anti-terrorism cooperation after what he described as “the successful meeting between President Vladimir Putin and President Rody Duterte in Lima, Peru”. He said Russia looks forward to President Duterte’s 2017 state visit to his country as “a historic event”, that details are still being planned by both sides, that President Duterte prefers not to go to Moscow during the cold winter.

Khovaev stressed that Russia is against any closed military alliances which usually target third-party countries, that is why Russia has no military alliances in Asia but just close strategic partnerships with China, Vietnam and India. In the same way, Ambassador Kovaev said Russia seeks partnership with the Philippines, but not any military alliance.

Ambassador Kohvaev added that Russia can sell and export modern military equipments and arms to the Philippines, that Russia does not sell second-hand weapons or vehicles, that their military sales shall also include support for military training and technology transfers. He cited as a good example of a good customer for Russian military exports for decades is the country of Vietnam.

Ambassador Khovaev said he likes the Benguet province high mountains’ Arabica coffee served at Kamuning Bakery Café (he drank 4 cups), urging the Philippines to be more aggressive in exporting agriculture and food products to Russia. In eating the pugon-baked pandesal breads and trying the old-style pugon baking process of Kamuning Bakery Café, Khovaev also said Russia is today the world’s

No. 1 biggest wheat producer but the Philippines still doesn’t import any Russian wheat yet. Still on the huge economic potentials of expanding cooperation, Khovaev said there are now 4,000 overseas Filipino workers in Russia, many of whom are in the oil industry of Sakhalin Islands. He said Russia welcomes more Filipino workers to his country, because Filipinos are talented.

On tourism, Ambassador Kohvaev said that the Philippines only welcomes 30,000 Russian tourists yearly while our Asean competitor and neighbor Thailand welcomes one million Russian tourists per year, so he urged the Philippines “to be more aggressive” in attracting Russian tourists. He added that 10% out of Russia’s 150 million people travel abroad every year as tourists, that the Philippines should aggressively tap this tourism market since the Philippines has many beautiful tourist attractions.

Ambassador Kohvaev supports the Philippines’ new reform of pursuing an independent foreign policy, because this pragmatic and wise policy is most beneficial fopr the Philippines’ national interests, can add to the country’s number of friends and allows for more maneuvering in diplomacy and economics too. He said Russia hopes to see the rise of “a new world order” where all countries big or small shall have mutual respect and non-interference in domestic affairs of each sovereign nation, that is why Ambassador Kohvaev said that Russia doesn’t want to comment or criticize the on-going war on illegal drugs of President Duterte, but Russia wishes the Philippines and the Duterte government great success in all anti-crime efforts and socio-economic development policies. He said Russia supports and will cooperate with the Philippines on anti-crime, anti-narcotics, anti-terrorism and other efforts.