Vietnam has 35 products and industries exported to the Philippines.
Phung Van Thanh, Commercial Counselor of the Vietnamese Embassy in the Philippines, said that the Philippine market is not too demanding or too strict in consuming products and services. Domestic demand for goods and services is large but depends heavily on imported products.
The top exporters to the Philippines include China, South Korea, Japan, Indonesia, and the United States. Vietnam ranks last in the list of the Philippines' top 10 trading partners. Major imports to the Philippines include electronics, minerals, vehicles, industrial equipment, and iron and steel.
The Philippines' exports are mainly agricultural products, of which the main export products are: coconut oil and coconut products, fresh bananas, mangoes, chemical products, and mining. The export of processed products and high-tech products is still very limited.
From the above characteristics, along with other factors such as geographical distance, similarities in consumer culture... Commercial Counselor Phung Van Thanh commented that the Philippines has become a market with great potential for Vietnam's export products.
According to Counselor Phung Van Thanh, there are about 35 items/industries of Vietnam exported to the Philippines, including important items/industries such as: Agricultural products, seafood, confectionery, animal feed, cement, iron and steel, construction materials, textiles, machinery, equipment... Of which, agricultural products, especially rice, always account for a large proportion in the export structure of Vietnam to the Philippines. In recent years, Vietnam has had a trade surplus with the Philippine market.
Despite the impact of the Covid-19 pandemic, in 2022, the total two-way import-export turnover between Vietnam and the Philippines will still reach over 7.8 billion USD, an increase of more than 14.7% compared to 2021. Of which, Vietnam's export turnover to the Philippines market will reach over 5.1 billion USD, an increase of 11.6% and import turnover will reach over 2.7 billion USD, an increase of 12.8%.
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| Rice is Vietnam's main export item to the Philippine market. Illustrative photo. |
Rice is Vietnam's main export product to the Philippine market, with export volume and turnover in 2022 reaching over 3.2 million tons and nearly 1.5 billion USD, respectively, accounting for about 85% of the Philippines' total rice imports. In 2022, rice exports to the Philippine market accounted for 45% in volume and about 43% in turnover of Vietnam's total rice export volume and turnover.
In 2023, Vietnam's rice export turnover to the Philippines market continues to make its mark when it reaches 1.75 billion USD, an increase of 17.6% compared to 2022, the amount of exported rice reaches 3.1 million tons, a decrease of 2% compared to 2022. However, Vietnam's rice still accounts for over 80% of the total rice imported by the Philippines.
The above figures have contributed to raising the total import-export turnover between Vietnam and the Philippines in 2023 to 7.8 billion USD, equivalent to 2022, of which exports reached 5.15 billion USD, up 1% compared to 2022, imports reached 2.65 billion USD, down 2% compared to 2022. The trade surplus with the Philippine market in 2023 reached 2.5 billion USD, up 4.2% compared to 2022.
Diversify products, boost exports
According to Counselor Pham Van Thanh, the Philippine market still has a large potential for Vietnam to continue exploiting. Vietnamese exporters need to maintain the Philippine market while expanding to new markets. To boost exports to the Philippine market, Commercial Counselor Phung Van Thanh proposed goals and directions to exploit this potential market, specifically:
Firstly, continue to consolidate and maintain Vietnam's No. 1 position in rice exports in the Philippine market.
“The Philippines is an agricultural country, including rice production. However, for many years, domestic production has not been able to meet consumption demand. Every year, depending on farming conditions, domestic production in the Philippines reaches about 19 to 20 million tons of paddy, equivalent to about 12.5 million tons of rice. Meanwhile, the annual rice consumption demand is about 14.5 million tons and the minimum reserve to ensure enough food for 30 days is about 1 million tons, meaning the total annual demand is about 15.5 million tons of rice. Therefore, every year the Philippines has to import from 2.5 million to 3.5 million tons of rice ,” Mr. Phung Van Thanh analyzed.
In previous years, the Philippines purchased rice through the Government-to-Government Negotiation (GTT) method, and Vietnam competed with Thailand, the two major rice exporting partners to the Philippines. However, since 2019, when the Philippines enacted and implemented a law allowing free import and export of rice and trade, removing quotas and restrictions on rice imports, Vietnam has surpassed Thailand to become an important supplier, taking the No. 1 position in rice exports to the Philippine market.
For the Philippines, Vietnamese rice is not only a regular import item but also an important item to ensure food security. Currently, rice imported from Vietnam accounts for more than 80% (over 83% in 2022) of the total rice imported by the Philippines.
In the Philippine market, Vietnamese rice has advantages. It is a high-quality, affordable product, so it is competitive, suitable for tastes and can meet the diverse needs of consumers, especially the large population with low and middle incomes. In addition, it has a stable supply, geographical distance, cost and convenience in transportation, trust and long-term customer relationships.
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| To boost export growth to the Philippine market, domestic enterprises need to expand and diversify export products. Illustrative photo |
Second , expand the product structure and increase export turnover and value.
Although the market still has a lot of potential, the export product structure of Vietnam and the Philippines is not yet balanced. The number of export items/industries is still limited, only about 35 items/industries, while there are many items/industries with potential to exploit in the Philippine market.
In addition, in the structure of Vietnam's exports to the Philippines, the proportion of agricultural products is large while other industries are fragmented, small-scale, and have less diverse products. No fresh agricultural products (fruits, meat) have entered the Philippine market despite the huge consumer demand.
Therefore, Mr. Thanh emphasized that expanding the product structure and increasing the export turnover and value of Vietnamese goods to the Philippine market is the top priority.
Third, promote promotional activities and increase domestic businesses' awareness of the Philippine market potential.
The Philippines is a market with great potential, however, in recent times, Vietnamese enterprises have paid little attention to this market, mainly small enterprises. Therefore, it is necessary to promote activities and increase awareness of Vietnamese enterprises about the potential of this market to boost exports.
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