Once touted as the next economic super power in Asia, Philippines has experienced both turbulent times and occasional phases of economic prosperity. Today, the Philippine economy is taking initiatives to march ahead of its economically superior neighbours-Malaysia, Hong Kong and Indonesia.

Making Giant Strides

The efforts have fetched it global recognition from the International Monetary Fund (IMF) which ranked it the 37th largest economy in the world in 2007. In view of these developments, India has realised the potential of the Philippine market that offers diverse areas of mutual cooperation between the two countries.

India is an important trading partner of Philippines. It is a major exporter of products such as rice, wheat, meat & meat products, drugs, pharmaceuticals & fine chemicals and transport equipments to Philippines. The products imported by India from Philippines include electronic goods, inorganic chemicals, newsprint, electrical machinery and transport equipments.

According to the Federation of Indian Chambers of Commerce and Industry (FICCI), there is immense scope for beneficial trade relations between India and Philippines. The organisation believes that the bilateral trade can increase to US$ 2 billion by 2010, provided both countries work on their trade relations.

Improved trade relations would especially benefit the small and medium enterprises in the two countries. Areas where Indian firms can invest in Philippines include industries like textile machinery, drugs & pharmaceuticals, software development & training, steel & metal, engineering consultancy and transport equipment.

Fostering Relations

To boost the Indo-Philippine trade relations, governments of both countries have set up institutional mechanisms that convene regularly. A Joint Working Group has been established to facilitate interactions between the businesses and governments of the two countries on issues of mutual interest. In addition, the India-Philippine Joint Council arranges conferences between the private businesses of India and Philippines.

In spite of the various initiatives taken by both sides, industry experts from both countries feel that the potential of bilateral trade is yet to be explored completely. Analysts point out that while Indian investment in the Philippines is restricted to the fields of textiles and chemicals, Philippine investment in India is concentrated in select sectors like telecom and human resource development (HRD).

In future, investments in other areas such as information technology (IT), health care and energy are expected to boost the economies of the two countries. The Indian SMEs should therefore explore the numerous business opportunities that can be tapped effectively in future. Small scale units (SSUs) of both countries can cooperate with each other through joint ventures, partnerships and mergers.

The two governments should implement treaties and agreements to lend support to the business houses. Areas that call for immediate attention are the issues concerning restricted trade and investment relations. By focusing on these critical areas, India and Philippines can forge better trade relations in the future.



Article Source: http://EzineArticles.com/?expert=David_K_Parks