H. E. Ronald B. Allarey

ANA: India and Philippines formally established diplomatic relations in 1949. Both countries became independent around the same time, both nations are democracies that share a common anti-colonial past. Why then, did the two countries drift apart during the cold war era?

H.E.: The Philippines established diplomatic relations with India on 16 November 1949. Three years later, the Philippines and India signed a Treaty of Friendship in Manila on 11 July 1952 to strengthen the friendly relations existing between the two countries. Soon after, the Philippine Legation in New Delhi was established and then elevated to an Embassy. However, due to foreign policy differences as a result of the bipolar alliance structure of the Cold War, the development of bilateral ties was stunted. It was only in 1976 that relations started to normalize when Mr. Aditya Birla, one of India's successful industrialists, met with then President Ferdinand E. Marcos to explore possibilities of setting up joint ventures in the Philippines.

ANA: There have been a regular and consistent foreign policy and security dialogue between the two countries over the last decade. Excellency, what is it that stands out as landmark developments in this dialogue process? And what are the areas where there is still divergence of views?

H.E.: The State Visit in 1991 of the late Indian President R. Venkataraman to the Philippines may be considered as a landmark development. During that visit, then Philippine President Corazon C. Aquino took the bold initiative of recognizing that the Kashmir issue should be settled by negotiations and discussions between India and Pakistan in accordance with the Shimla Agreement. She also condemned racial discrimination against ethnic Indians abroad. On said occasion,, landmark Philippines-India agreements on cooperation in agriculture and on the peaceful use of atomic energy were signed. President Venkataraman, after the visit, said that "India gained a friend" in the Philippines.

[expand title="Read More"]You must understand that this was shortly after the end of the Cold War, during which time the Philippines and India were aligned on opposing sides.

More recently, at the Inaugural Meeting of the Philippines-India Joint Commission on Bilateral Cooperation, the Philippines and India reviewed progress in the three (3) working groups of the Joint Commission: on Tourism Cooperation, Agricultural Cooperation, and Trade and Investment.

Both sides were pleased to note that the target of US$ 1 billion in bilateral trade by 2010, set by the Joint Working Group on Trade and Investment at its 10th meeting in New Delhi on 21-22 November 2008, was met. They reaffirmed their commitment to the reform of the United Nations, particularly the Security Council through its expansion in the permanent and non-permanent categories, with increased representation for developing countries in both, in order to improve its efficiency, representativeness, and legitimacy, and for it to better meet the contemporary challenges faced by the international community.

Likewise, the two countries agreed to have closer coordination in the regional and multilateral fora. India looked forward to the possible first visit of H.E. Mr. Benigno S. Aquino-III, President of the Republic of the Philippines to India for the ASEAN-India Commemorative Summit in 2012. They also reviewed the progress of the 3rd Security Dialogue held in Manila in October 2009 and agreed to rename it as "Strategic Dialogue" to broaden its scope and urged the early convening of the first meeting of the Joint Defence Cooperation Committee (JDCC). The two sides unequivocally condemned terrorism in all its forms and manifestations and resolved to significantly enhance bilateral cooperation to combat terrorism. In this regard, they decided to hold the first meeting of the Joint Working Group (JWG) on Counter Terrorism later this year. A bilateral Cultural Exchange Program (CEP) for the year 2011-13 was also signed.

ANA: Do you agree Excellency that potential for bilateral engagement has increased considerably in the current global and regional environment and with deepening relations between India and ASEAN in the context of India's 'Look East Policy'.

H.E.: In the context of ASEAN-India relations, Prime Minister Manmohan Singh visited the Philippines in January 2007 to participate in the 5th ASEAN-India Summit and 2nd East Asia Summit in Cebu City. Then Philippine President Gloria Macapagal Arroyo met with Prime Minister Singh on 14 January 2007 before the opening of the ASEAN-India Summit. The two leaders discussed, among others, strengthening cooperation in the fields of dairy production, importation of affordable medicines, and combating terrorism. The two leaders also exchanged views on bilateral, regional and multilateral issues of mutual concern.

Following the successful participation of the Philippines in the ASEAN – India Business Fair in New Delhi in March 2011, as well as the launching of direct flights between Manila and New Delhi on 27 March 2011, the connections between the Philippines and India are indeed getting closer and closer.

The signing of the four agreements encompassing the ASEAN-India Free Trade Agreement on August 13, 2009 in Bangkok and the subsequent negotiations on liberalizing trade in services and investment are even more exciting for us in ASEAN. These developments bring us ever closer together, where India's "Look East" has met with an enthusiastic response from the Philippines.

Today, ASEAN can rightly be considered as a powerhouse in Asia. ASEAN spans over an area of 4.46 million km2, 3% of the total land area of the Earth, with a population of approximately 600 million people, 8.8% of the world population. In 2010, its combined nominal GDP had grown to USD $1.8 trillion. If ASEAN were a single country, it would rank as the 9th largest economy in the world and the 3rd largest in Asia in terms of nominal GDP.

Why is ASEAN important to India, indeed to Central and South Asia as well? We have to remember that ASEAN's aims include the acceleration of economic growth, social progress, cultural development among its members, the maintenance of peace and stability in the region, and the provision of opportunities for member countries to discuss differences peacefully. That ASEAN remains, and is getting stronger by the day, is, I believe, a testament to the strategic forethought of its Founding Fathers.

ANA: According to statistics available with us, trade between the two countries has more than trebled from US $ 338.50 million in 2001-02 to US $ 1061.84 million in 2009-10. Many agreements and MoUs have been signed and the India – Philippines Joint Working Group (JWG) on Trade and Economic Relations has been meeting regularly. Excellency, what potential do you see of further expansion of trade and commerce and what, in your opinion, are the impediments that still exist?

H.E.: Our trade relations are entering a new phase, and although total trade between the Philippines and India has already reached US$ 1 billion as of 2011, I believe that our trade ties will still continue to increase in the years to come. We need to find a way by which we can balance our trade because in the past, it has always been in India's favour. The Philippines will have to work aggressively to export to India and we hope that India will also be open to import our products. We hope that in the foreseeable future, Philippines – India trade will be more equitable for both our countries.

India's foreign direct investments to the Philippines are mainly in the areas of textiles, Business Process Outsourcing and IT-enabled services and recently, steel. We hope we can encourage more Indian businesses to invest in our country in the coming years. Philippine companies have invested in India's IT, ports management, food and beverage sectors, among others.

The products for promotion that were identified by the Philippine Department of Trade and Industry for promotion in India are metal parts and components, electronic components, processed fruits, ceramics, gloves and mittens, seaweeds and derivatives (carageenan), phosphatic fertilizers, chemicals like fatty alcohols, coconut and vegetable oils, refined glycerol (glycerine), and surface active washing or cleaning preparations. We intend to increase bilateral trade even further with initiatives of the Federation of Indian Chambers of Commerce and Industry, Associated Chambers of Commerce and Industry of India (ASSOCHAM), Confederation of Indian Industry (CII), Philippine Chamber of Commerce and Industry (PCCI), the Philippine-India Business Council (PIBC), and the Federation of Indian Chamber of Commerce in the Philippines (FICCP).

As for impediments, I believe that the primary issues are awareness and opening business channels. There is a lack of awareness in India on the trade opportunities available from the Philippines. In particular, I wish to highlight our top exports from the electronics sector – our strongest export earner. The Philippines is home to some of the world's largest OEM (Original Equipment Manufacturers) and ODM (Original Design Manufacturers) of the electronics industry. Primarily our industry caters to the intermediate export market, where micro-chips and electronics components are exported across the globe for further value-addition. I see great synergy for the value chains of our respective industries in this regard - India can further boost its industrial capability with the support of Philippine electronic component manufacturers.

ANA: The India - ASEAN FTA has been concluded. Excellency in what manner would economic cooperation between India and the Philippines be impacted as a result?

H.E.: We are optimistic about the prospects for greater India-ASEAN trade following the signing on 13 August 2009 of the ASEAN-India trade in goods agreement. Its implementation would further accelerate trade and investment between ASEAN and India. We are also optimistic about the negotiations for the ASEAN-India agreement in services and investment, the negotiations of which commenced at the ASEAN-India Trade Negotiating Committee (AITNC) Meeting in Manila in October 2008.

There is a need to address existing constitutional provisions within the Philippines in certain areas of the ongoing negotiations.

ANA: The Philippines-India Agreement on the Promotion and Protection of Investments was signed in January 2000 with the objective to enhance commercial, industrial and other economic activities by providing favourable conditions for investments. Excellency, Indian investments to the Philippines remain modest. At a time when India is exploring investment opportunities abroad, is the investment climate in Philippines adequate?

H.E.: The Philippines and India already have several avenues of cooperation that have been revitalized in recent times, most noticeably in the still-booming outsourcing industry where the Philippines hopes to advance from the voice-based BPOs to other ITES areas like animation and systems design. Tourist arrivals are increasing and six weekly Manila-Delhi flights by Philippine Airlines started this year.

According to our Department of Trade and Industry, Moody's Investor services recently upgraded the outlook on the Philippines' foreign and local-currency bond ratings to positive from stable, after the government sold US$ 1.25 billion of 25-year global peso bonds. A rating upgrade like this would depend on the government's commitment to fiscal consolidation in an improving economic environment. Moody's cited a strengthened external payments position, well-anchored inflation expectations, and improved prospects for economic reform.

According to Moody's the Philippines under the Aquino administration had made a "notable turnaround in fiscal management" in its first 6 months in office. Credit rating agencies have also noted the current administration's notable efforts at fiscal management. Just this month, Moody's Investor's Service upgraded the country to Ba2 with a stable outlook. This is just one notch below investment grade. This rating is expected to further lower the cost of borrowing and servicing the country's debt and will also widen the pool of potential investors of government bonds.

The Philippine economy continues to be buoyant and demonstrates resilient economic growth in the face of the global financial crisis. "Foreign exchange reserves continue to accrue at record levels on the back of robust overseas foreign worker remittances, services exports, and sizeable capital inflows," according to Moody's. Further boosting domestic consumer confidence and attracting more foreign direct investments is the clear political mandate of President Benigno S. Aquino III following the May 2010 elections. Furthermore, the Bangko Sentral ng Pilipinas’ inflation targeting regime has gained traction and has contributed to macroeconomic stability.

We welcome Indian investments in the country.

Our new government's flagship engine of spurring investment and infrastructure development is the Public Private Partnership Program. Through this scheme, we envision greater investments in key infrastructure sectors necessary for the achievement of the development goals set out by our economic managers. Key areas include transportation, power, renewable energy, and infrastructure.

Apart from the existing investments in Information Technology Enabled Services, we look forward to new investments where we can leverage on your country's highly developed industrial base and encourage Indian investments in manufacturing, pharmaceuticals, energy, tourism, and agriculture.

ANA: Excellency you are aware, Indian cultural influence reached the Philippines indirectly via two great Indo-Malayan empires which traded with the Philippines - the Sriwijaya Empire (7th to 13th centuries) based in Palembang, Sumatra, and the Majapahit Empire (1293 to 1527), centred in Java. Are you satisfied with the current status of cultural exchanges between the two countries?

H.E.: As I mentioned earlier, an Executive Program on Cultural Exchange for the period 2011-2013 was signed during the India-Philippines Joint Commission Meeting last March, providing for the exchange of film technology, theatre arts directors and managers, and literature exchanges, among others. I agree that Philippine cultural ties with India date back to the 14th century through the Sri Vijaya and Madjapahit Empires. A quarter of the root words of Filipino, our national language, is Sanskrit in origin. Our ancient syllabic script, called 'Baybayin' is a descendant of the 'Kawi' script which in turn is part of the Brahmic family of languages, also Sanskrit in origin. The cultural links between Philippines and India are pregnant with possibilities.

ANA: Finally, Excellency, what are your expert views on the quality and adequacy of News behind the News for India based diplomats? The almost 4 decade old journal is structured exclusively to cater to the needs of diplomats in India.

H.E.: Diplomats are very busy individuals. News services such as yours must be able provide readable and quality brief but substantive 'digests' of news in India and throughout South and Central Asia. Diplomats, in turn, report these developments to their respective capitals. Obviously, truth, impartiality, objectivity and reliability are major factors affecting our choice of reading material.