Philippines looks to China for farms 'windfall' when fruit ban ends

October 9, 2016 11:41 AM EDT

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By Karen Lema

MANILA (Reuters) - China will lift a Philippine fruit ban and explore broader farm and fisheries imports and investments in its fledgling farm sector, the Philippine agriculture minister said, signaling serious intent by Manila to beef up business with Beijing.

China would resume shipments from 27 blacklisted fruit exporters as a "gift" when President Rodrigo Duterte visits with a business delegation from Oct. 19-21, Agriculture Secretary Emmanuel Pinol told Reuters on Sunday.

"I would look at that as a goodwill move," he said. "The atmosphere would be positive."

Pinol's comments suggest Duterte is following through on his promises to build a commercial alliance with China, made repeatedly in speeches in which he has angrily alluded to cutting ties with the United States and reaching out to its geopolitical rivals.

The trade talk with China is hugely symbolic and marks a stark turnaround in ties since a July arbitration ruling in The Hague went in Manila's favor and angered Beijing by invalidating its claim to almost the entire South China Sea.

Duterte is forging ahead, even as mistrust lingers over China's four-year blockade of Filipino fishermen at the Scarborough Shoal.

Pinol said ending the ban on bananas and pineapples would boost demand in other parts of a farm sector that has seen its output contract for two successive quarters.

"Since we are not involved in the diplomatic issues, we are just looking at this as a windfall for Philippine agriculture because China, we have to admit, is our biggest market for our agriculture products," he said by phone.

"The interest of China in importing fisheries products will spur development," he said, adding the demand would see Filipino farmers ramp up their output.


Agriculture accounts for about one-tenth of the Philippine economy. Farm output dropped 4.4 percent in the first quarter from a year earlier, followed by a 2.1 percent contraction in the second quarter, according to government data.

Together with the impact of the El Nino weather pattern, the ban, he said, had seen earnings from banana shipments down by half in 2015 from about $1.1 billion in 2014.

Pinol said Beijing's ambassador to the Philippines had informed him China would look to import mango and dragon fruit, plus fisheries produce like crab, shrimp, grouper and milkfish. China imported just 6.3 percent of the Philippines' $1.3 billion in seafood shipments in 2014, compared to 25 percent to the United States, according to most recent official data.

Finance secretary, Carlos Dominguez, on Saturday told Reuters Duterte was seeking billions of dollars of Chinese infrastructure investments, including rail lines and power grids.

Duterte's defense minister on Friday said moves were afoot also to acquire Chinese arms.

Pinol was hopeful that an invitation by the Bank of China to attend events in China could create opportunities to secure much-needed financing, and he said he expected China to very soon increase imports of different produce because its export firms were already active in the Philippines.

"That should happen fast because there are Chinese groups here waiting for the ban to be lifted," he said.

"These are exporting companies and they buy their produce from farmers."

(Writing by Martin Petty, editing by David Evans)

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