ING Bank Manila economist hopes for positive outcome in PHL exports amidst UN Tribunal’s decision

MANILA — A United Nations (UN) Tribunal ruling favoring the Philippines on the West Philippine Sea (South China Sea) dispute has led some Chinese netizens to call for boycott of mangoes from the Philippines.

Among the Philippines exports to China, the world’s second largest economy, are electronics and mineral products.

In 2015, China was the Philippines’ second largest trading partner with a share of 13.6 percent of total trade, amounting to USD 17.646 billion.

Some analysts said the figures faced adjustments as a result of the resolution of The Hague, Netherlands-based Permanent Court of Arbitration, which on July 12, 2016 ruled in favor of the Philippines.

In a press release, the Tribunal said it “found that Mischief Reef, Second Thomas Shoal and Reed Bank are submerged at high tide, form part of the exclusive economic zone and continental shelf of the Philippines, and are not overlapped by any possible entitlement of China.”

It also cited that China interfered with Philippine petroleum exploration in Reed Bank, purported to prohibit fishing by Philippine vessels within the Philippines’ exclusive economic zone, protected and failed to prevent Chinese fishermen from fishing within the Philippines’ exclusive economic zone at Mischief Reef and Second Thomas Shoal and constructed installations and artificial islands at Mischief Reef without the authorization of the Philippines.

”The Tribunal therefore concluded that China had violated the Philippines’ sovereign rights with respect to its exclusive economic zone and continental shelf,” it said.

Mischief Reef is also called Panganiban Reef in the Philippines, Second Thomas Shoal is known as Ayungin Shoal and Reed Bank as Recto Bank.

The maritime dispute between the Philippines and China is among the numerous overlapping territorial claims in the region.

In a research note, ING Bank chief economist in Asia Tim Condon said “an official boycott that reduced exports to zero would be a significant negative growth shock” for the Philippines.

He explained that exports account for 48 percent of Philippines domestic output, as measured by gross domestic product (GDP) “so simple arithmetic puts the size of the shock at six percentage points.”

He pointed out that although this would also result to lower imports from China “closure of the China market would be bad.”

”Netizens take their cue from the government, however, and the baseline is that cooler heads will prevail and trade relations will go on as before,” he added. Joann Santiago/PNA/northboundasia.com