Public-Private Partnership Center

SYDNEY — Philippine and Australian officials will start a two-day meeting today to discuss trade and investments, development assistance, and defense and security matters as relations between the two nations deepen further under a regional trade deal.

Foreign affairs and trade officials will also hold a dialogue with businessmen, including major investors in the mining and oil and gas sectors, in the Australian capital of Canberra.

Trade ties between the two countries have expanded over the past year with the entry into force of the ASEAN-Australia-New Zealand Free Trade Agreement (FTA) on Jan. 1, 2010. The biennial ministerial meeting will be an occasion for Manila and Canberra to assess the progress of the 12-nation deal.

Bulk of the trade under the new FTA has been between the Philippines and Australia, said Ross Bray, senior trade and investment commissioner for the Philippines and Micronesia. The benefits of the deal are already being realized in terms of increasing trade, he added.

“The greatest uptake … [is by] the Philippines and Australia. Half of the certificates of origin [needed to obtain lower tariff or tariff-free access] are from the Philippines and Australia,” Mr. Bray said.

Manila agreed to eliminate tariffs on 96% of tariff lines under the deal, retaining protection for sensitive items like rice and sugar, while Australia and New Zealand would bring tariffs down to zero by 2020. It has allowed the Philippines to be on equal footing with Thailand, a major competitor that has a bilateral FTA with Australia and New Zealand. Filipino exporters of automotive parts, wiring harnesses, and food have benefited from the one-year-old regional deal, Mr. Bray said.

Two-way trade, though, went down by a fifth to A$1.55 billion in the July 2009-June 2010 fiscal year, Australian data showed. Australia is only 17th in the list of the Philippines’ top export markets and the 15th biggest source of imports.

“Our trade bilaterally is small compared to ASEAN (Association of Southeast Asian Nations). The Philippines tends to look toward the US, while Australia tends to look toward Europe,” Mr. Bray said.

There’s a lot more interest now in the Philippine market amid high expectations for the Aquino administration, he claimed, adding that promises to get rid of corruption and increase transparency were “going a long way.”

Australia is interested in helping the Aquino government roll out its centerpiece private-public partnership or PPP scheme that aims to upgrade the country’s infrastructure, and also wants to bring in investments in renewable energy aside from mining.

Canberra committed to A$118.1 million in official development assistance to Manila for the 2010-2011 fiscal year and this includes technical assistance for PPP projects, said Nina Padilla Cainglet, director of the Department of Foreign Affairs’ Office of Asian and Pacific Affairs.

The Philippines is also looking at enhancing “people to people” links with Australia in the form of scholarships, training, and cultural exchanges, Ms. Cainglet said.

The Australian delegation to the Canberra ministerial meeting will be headed by Kevin Rudd, foreign minister, and Craig Emerson, trade minister. The Philippine delegation will be headed by Foreign Affairs Secretary Albert del Rosario and Trade Secretary Gregory Domingo. Both sides are expected to issue a joint statement tomorrow after discussions on security and counter-terrorism, trade, ASEAN relations, Australian aid, fisheries and forestry, and skilled migration.

Australia’s aid strategy in the Philippines for the next five years was supposed to be unveiled this week but Canberra has decided to undertake an “aid effectiveness” review, officials said.

Twenty-five executives and government officials will attend a business dialogue today, including representatives of Xstrata Copper and Indophil Resources NL, partners in the stalled Tampakan copper-gold project in Mindanao. A ban on open-pit mining imposed by the South Cotabato provincial government, which has delayed the $5.9-billion venture, is expected to be discussed.

Australia has an estimated A$1.8 billion in investments in the Philippines, of which A$410 million comprises direct investments. The Philippines, meanwhile, has A$584 million in investments in Australia.

Posted on June 14, 2011 11:10:32 PM, BusinessWorld Online