Lankan-Philippines trade up 59%

With YoY bilateral trade between Sri Lanka and Philippines, the fifth largest ASEAN nation, rising 59%, Commerce Minister Rishad Bathiudeen called for the reactivation of the 1980 landmark agreement.

"We have no doubt that the Philippines could become our key East Asian trade partner. We need to jointly re-activate, the landmark 1980 Trade Agreement between both countries," Minister of Industry and Commerce, Rishad Bathiudeen told the 41st Philippine Business Conference and Exposition in Pasaya City, Philippines, recently.

He was accompanied by a 14-member Lankan business delegation representing 11 Lankan firms in the sectors of packaging, aviation, shipping, travel, engineering, tea and construction.

"A founder member of ASEAN in 1967, the Philippines today has become a key manufacturing hub in Asia. Sri Lanka hopes to rapidly develop through industrial development projects and economic reforms based onthe 'Social Market Economic Model' as the government hopes to introduce major reforms across many sectors," he said.

The creation of 45 economic development zones, 11 industrial and technical zones, two tourism zones, 23 agricultural zones, 10 fisheries development zones and 2,500 market-centred cluster villages are some of the initiatives.

"The creation of 34 investment promotion zones where international investors including investors from the Philippines could invest and enhance our global market presence and competitiveness. Trade promotion in key markets and Asian tiger economies such as the Philippines will enhance our competitive advantage," Minister Bathiudeen said.

"We need to jointly re-activate the landmark 1980 Trade Agreement between both countries to take our bilateral trade to the next level. In 2000 bilateral communications on cooperation based on the 1980 landmark agreement commenced along with a process for a new double taxation avoidance agreement, but then slowed down," the Minister said.

"Though our bilateral trade remains at modest levels of $64 million, a continuous trade increase over the years is clearly visible. Sri Lanka is ready to leverage on lessons learnt from the Philippines. Since the Philippines is the world's largest producer of coconuts and as coconuts are also among the top traditional exports of Sri Lanka, bilateral cooperation is possible in this sector as well," he said.

"There are many opportunities for Philippine investors in Sri Lanka through the Indo-Sri Lanka Free Trade Agreement and Pakistan-Sri Lanka Free Trade Agreement. I invite the Philippines manufacturers and investors, aiming to move into South Asia, to partner with Sri Lanka and make use of export opportunities to India and Pakistan which have a huge market," the Minister said.

"Investments in Sri Lanka are protected by a constitutional guarantee. Therefore, you have almost no risk in recovering your investments when you invest with us.

The proposed Double Taxation Avoidance Agreement between the Philippines and Sri Lanka reduces bilateral trade costs on both sides and is a great investment incentive," he said.

According to Department of Commerce sources, bilateral trade between both countries have been on the upward trend. From 2010-2014 there has been a 225% increase in bilateral trade between Sri Lanka and the Phillipines.

Printing materials are Sri Lanka's leading exports to the Philippines while malts and wood charcoal are top imports from Philippines to Sri Lanka.