This year marks the 65th anniversary of the bilateral diplomatic relations of the State of Israel and the Republic of the Philippines which was established back in 1958. Since then, both countries managed to develop and maintain strong and friendly relations, relying on extensive cooperation in the areas of agriculture, defense, labor, tourism, technology and innovation, as well as trade and investments.
An evidence to the tightening Israel-Philippines relations is the growing volume of the bilateral trade, reaching its peak in 2022 with a total of USD534 million worth of goods. This is an impressive 70% year-over-year growth rate, driven by rebounding of both the Israeli and Philippine economies in 2022 following the Covid-19 crisis.
Economic Counselor and Head of the Israeli Economic Mission to the Philippines Tomer Heyvi mentioned, “2022 was indeed a track record year of Israel-Philippines bilateral trade relations with a remarkable 70% YOY growth rate, but the potential is much higher and yet to be fulfilled. In recent few years, we see a growing demand in the Philippines for Israeli products and technologies in various sectors such as agriculture, water, homeland, cybersecurity, ICT and connectivity, medical device and healthcare, among others. As a consequence, the Foreign Trade Administration within the Ministry of Economy and Industry of Israel, decided to establish an Economic Mission to the Philippines to further boost the commercial ties between Israeli and Filipino companies.”
“At the same time, there is also a growing demand in Israel for products and services from the Philippines such as electronics, agriculture produce among other products, as well as BPO services. This is represented in the consecutive growth of our imports from the Philippines in both 2021 and 2022,” Heyvi added.
According to the Central Bureau of Statistics, the export of goods from Israel to the Philippines in 2022 grew by 94% from the previous year, and reached USD340 million worth of goods.
Machinery and Electronic Equipment were the top exported category with a 54% share valued at USD183 million. This category includes semiconductors, telephone sets, electronic integrated circuits, automatic vending machines, valves and data processing equipment. The next category was Transportation Equipment with a 30% share, mainly includes aerospace and maritime equipment for the Philippines defense industry. Base metals accounted for 9% of the total Israeli exports while Optical Equipment, mainly referring to optical fiber, medical appliances and various industrial tools, accounted for 5.6%. Chemical Products, mainly referring to fertilizers, organic chemicals, cosmetics and pharmaceutical products accounted for 2.6%, while Rubber and Plastics at 2.2% mainly refers to industrial products. Finally, Agricultural Products and Foodstuff such as fruit juices, sauces, sugar and edible vegetables, accounted for about 1.6% only.
The Israel imports from the Philippines in 2022 grew by 39% from the previous year, reaching USD193 million worth of goods.
The top category was Machinery and Electronic Equipment which includes electronic integrated circuits, printing machinery, engine and motors, telephone sets, vacuum cleaners and water heaters, accounting for 83% of the total imports. Next was the Agricultural Products and Foodstuff with a 6.1% share, mainly includes edible fruits and nuts (mainly coconut), fruit juices, baked goods, tapioca and fish products. Textile and Footwear accounted for 5.3%, mainly includes footwear, bags, clothing and clothing accessories, while Optical & Medical accounted for 3.7%, mainly referring to gas and water meters, optical fibers measuring instruments and medical instruments and appliances.
The above trade statistics are limited to trade in goods and do not include trade in business services such as cybersecurity services and enterprises solutions exported from Israel versus BPO services imported from the Philippines. Therefore, the estimated bilateral trade of Israel and the Philippines in both goods and services is expected to be higher than USD534 million.
The growing bilateral trade relations between Israel and the Philippines are also reflected in the closer economic dialogues between the two countries.
In June 2022, few important agreements and MOUs were signed during the visit of former Department of Trade and Industry Secretary Ramon Lopez to Israel. Among them was the Investment Promotion and Protection Agreement, expected to enter into force within this year.
Another one is the MOU between the DTI and the Israel Ministry of Economy and Industry on Economic Cooperation and the establishment of a Joint Economic Commission. The first JEC is expected to take place this year and further promote the bilateral trade relations between Israel and the Philippines.
