Updated 14:41 PM PHT Sun, March 19, 2017
Metro Manila (CNN Philippines) — The controversies on Benham Rise and South China Sea have been making headlines for days, but this didn't stop China and the Philippines from strengthening economic ties during Chinese Vice Premier Wang Yang's four-day visit to the country.
In a statement released Saturday, the Finance Department revealed China and the Philippines have just signed the Six-Year Development Program (SYDP) for trade and economic cooperation, along with other agreements for two major infrastructure projects in Visayas and Mindanao.
The Department of Finance (DOF) said the six-year deal was signed by National Economic and Development Authority (NEDA) Secretary Ernesto Pernia and Chinese Commerce Vice Minister Fu Ziying after a meeting between Philippine and Chinese officials in Davao City.
The SYDP will serve as the overall framework for more economic agreements between the Philippines and China within this administration.
The deal "aims to steer and promote the stable and orderly development of economic cooperation between the two countries," the Finance Department said.
Chinese and Philippine Officials also tackled possible preliminary studies for the Davao Expressway, and bridges connecting Panay, Guimaras, and Negros islands.
Moreover, the Chinese government is reviewing loan applications for infrastructure priority projects, including the $53.6-million Chico River Pump Irrigation Project in Cagayan and Kalinga provinces, the $374-million New Centennial Water Source-Kaliwa Dam Project in Quezon province, and $3.01-billion south line of the North-South Railway
DTI: China to become no. 1 trading partner in 2017
These developments come amid the expanding trade between China and the Philippines.
China- already one of the Philippines' biggest trade partners- is set to be the Philippines' top trading partner this 2017, Trade and Industry Secretary Ramon Lopez said.
"China is the Philippines' second largest trading partner. But we are reviewing the figures, because from the latest numbers, it is showing that China would be, if not, is already the top trading partner of the Philippines," he said.
In January 2017, two-way trade with China amounted to some $2.05 billion- $360 million more than with Japan, its closest rival for the Philippines market.
Chinese investors have purchased a record $1.7 billion worth of mostly agricultural products from the Philippines.
Several letters of intent have also been signed for potential investments by Chinese firms in the Philippines.
These include oil downstream projects, aviation, waste energy, gassification, ship repair, shipbuilding facilities and integrated iron and steel facilities.
Tourism is also a beneficiary, with more than a million Chinese visitors expected this year.
Wang said Chinese air carriers are planning to increase the number of planes flying weekly between the Philippines and mainland China by almost double.
"China's Civil Aviation Bureau told us that this year, the number will increase to 265 (from 159)," Wang said.
In return for the economic deals, China wants the Philippines to further liberalize trade policies, which means exposing local industries to fiercer foreign competition.
China is also urging the Philippine government to build more industrial zones with financial incentives for Chinese firms.
Blooming trade ties
At the China-Philippines Cross-Border Trade and Investment Conference held in Manila Saturday, Vice Premier Wang said trade between the Philippines and China is poised to grow even more.
The event, which saw Chinese and Filipino businessmen holding conversations, exchanging calling cards, and signing business deals was attended by almost a thousand entrepreneurs.
"Chinese companies present here today who are interested in this can step up your market research, and the Chinese government will provide favorable conditions for you to enter the market," the Vice Premier told participants.
Wang added the event was a manifestation of the thriving trade relations between the two countries.
"In recent months, Chinese companies flooded into the Philippines to talk about investment projects on manufacturing, processing, infrastructure, agriculture and e-commerce," he said.