MANILA -- Philippines' importance to China's Belt and Road initiative will likely be seen in a few years as opportunities are high.
The Duterte government's move to strengthen ties with China in 2016 has received strong support from the Bank of China Ltd. (BOC), among others, which has committed a USD3 billion credit line for Philippine businesses within the next five years.
Part of this move is the business matching event set by the Chinese financial institution in Manila in March 2017.
Trade and Industry Undersecretary for Regional Operations Group Zenaida Maglaya, during a briefing hosted by BOC in New World Hotel in Makati City Wednesday, disclosed that 83 percent of the 287 Philippines-based companies that have signed up for the business matching event have found their match.
She said 237 of the 287 Philippines-based small and medium enterprises (SMEs) that have submitted applications to join the business matching event have found 129 Chinese investors who are interested for partnerships.
"It's really something that is worth monitoring and for us to go through working with Bank of China," she said.
"We want to really explore more opportunities to export more because China has lots to buy and we have more to offer," she added.
BOC Ltd Manila Branch Country Head Deng Jun said SMEs that have signed up for the even come from various sectors such as agriculture, tourism and manufacturing.
He revealed that among the sectors that topped the demand for business matching are agriculture and tourism, which he said surprised stakeholders that have partnered to come up with the business matching event.
"It also surprises meWe thought that most of the demand from the Philippines should be manufacturing but unfortunately its agriculture," he said.
Jun said SMEs from the Philippines want to sell more fruits, vegetables and sugar to the Chinese market while Chinese companies want to invest in hotels and resorts and appliances and equipment for these businesses.
The Chinese government's Belt and Road initiative bids to link economic players in Asia, Europe, and Africa along the Belt and Road routes.
It has two routes namely the Silk Road Economic Belt (SREB) that covers Central Asia, West Asia, the Middle East, and Europe and the Maritime Silk Road (MSR), which runs from Southeast Asia, Oceania, and North Africa through South China Sea, South Pacific Ocean and the Indian Ocean.
BOC, which has a commercial bank license in the Philippines and is the fourth largest bank in the world in terms of assets, have "several thousands" domestic borrowers.
Jun said the bank's total loan portfolio (TLP) to date amounts to around Php 20 billion, with an equal share between corporate and interbank loans.
SME loans account for about 10-12 percent of BOC Manila's TLP, he said.
Jun explained that businesses that have been matched during the bank's pre-business matching event have not been finalized because the involved parties have yet to meet in March.
He clarified that the USD3 billion credit facility that have been committed for Philippine businesses will support projects targeted for various sectors and not just for the SME sector "to support the economy."
BOC have partnered with government financial institution Land Bank of the Philippines (Landbank), the Sy-led Banco de Oro Unibank Inc. (BDO) and the Gutianun-led East West Banking Corporation (EastWest Bank) in getting the interest of domestic SME players.
Jun said they had also partnered with the Department of Trade and Industry-attached agency Small Business Corporation (SB Corp.), established to help micro, small and medium enterprises (MSMEs), as well as the various business chambers to further promote the bid to help the SME sector..
He stressed that BOC is not getting the list of SME clients of local banks to compete with the latter but to serve as a bridge between local SME players and Chinese investors.
He said local SMEs will still get financing from the Philippine-based banks but noted that BOC is open to co-financing deals with the local banks. (PNA)
Source: Philippines News Agency