Date: June 2003

The Peripatetic President

Last month it was Washington, last week it was Seoul and Tokyo. President Gloria Macapagal-Arroyo was leaving no doubt about whom the rest of the world regards as the true president of the Philippines. She was in Seoul from 2 to 4 June and in Tokyo from June 5 and 6.

Trade and investment issues were high on the agenda for discussions in both countries. In Seoul, where President Macapagal-Arroyo was the first foreign head of state to be received by the new Korean President, Roh Moo-hyun, the Philippines delegation is reported to have pressed for lower import duties to be applied to exports of copper cathodes and bananas. China and Korea are the largest markets for copper cathodes from the Philippines although exports to Korea appear in danger since a recent agreement between Korea and Chile lowered duties on similar products from Chile. The Philippines now wants the same treatment. In addition to improved trade access, the Philippines side is also reported to have pushed to have Korean Air set up its new in-house call center facility in the Philippines.

While in Seoul the president signed three government-to-government agreements relating to legal coordination, energy and finance as well as two business agreements covering the energy and rail sectors. State-owned Korean Electric Power Corporation (KEPCO) will invest $100 million to build and operate two 50 mW power plants for Panay Island. This will be in addition to its existing plants in the Philippines. KEPCO-owned plants currently supply 14% of the Philippines electrical generating capacity. The Daewoo Corporation is to invest in a rail transportation project for Metro Manila.

Total investment committed from Korea as a result of the visit is said to be around US$500 million.

According to press reports President Arroyo also committed the Philippines to a "lead role" in helping to resolve the crisis over North Korea's nuclear and missile programs. Philippines Foreign Minister, Blas Ople, is - according to reports - on his way to Pyongyang shortly and has been given the task of drafting a resolution acceptable to ASEAN members supporting the denuclearization of the Korean peninsula. Just how such a resolution will go down in Washington remains to be seen. Frankly, the problems of the Korean peninsula have vexed world leaders for decades now and just how the Philippines can fix it all up remains a mystery. In return, it seems, the Philippines will receive military assistance from Korea in the form of second-hand F5 fighter jets to be donated by the Korean government.

In Tokyo, the President met with Japanese Prime Minister Junichiro Koizumi, as well as Japanese business leaders. During her three-day visit she also addressed a regional conference on the future of Asia along with Malaysian Prime Minister Mahatir Mohamad and Thai Prime Minister, Thaksin Shinawatra.

Japanese investors, working through the Japanese Chamber of Commerce and Industry in the Philippines have been pushing the government here for some time for greater progress on infrastructure, peace and order and labor issues (in particular the activities of radical labor groups). Resolution of these issues is seen as being a key ingredient for attracting further Japanese investment into the country. In this regard, the Chamber here signaled its satisfaction at recent progress ahead of President Arroyo's departure from Manila.

In Tokyo, Trade and Industry Secretary, Manuel A. Roxas met with major Japanese trading houses and reported that investors were bullish in their outlook on the Philippines. In addition to addressing specific concerns of individual companies, the delegation also resumed negotiation on mutual recognition arrangements in major areas previously targeted including sanitary and phytosanitary requirements and employment of Filipino nurses in Japan.

New Japanese assistance to the Philippines includes military and naval equipment including patrol boats, an automated fingerprint identification system for the police and equipment for the Research Institute for Tropical Medicine. Japan will also provide new technical assistance to fruit exporters in Mindanao and for manpower training in the IT sector.

 

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