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PHILIPPINE - INDIA RELATIONS: AN OVERVIEW

   

ESTABLISHMENT OF DIPLOMATIC RELATIONS

The Philippines established diplomatic relations with India on 16 November 1949. The first Philippine envoy to India was the late Foreign Secretary Narciso Ramos. Seven years after India's independence in 1947, the Philippines and India signed a Treaty of Friendship on 11 July 1952 in Manila to strengthen and perpetuate 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 relations 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. This resulted in the establishment of Indo-Philippine Textile Mills, Inc. (Indo-Phil), then the largest Indian investment in the country. Indo-Phil currently employs 2,000 Filipino workers and supplies 40% of Philippine domestic demand for yarn.


 
POLITICAL COOPERATION

 

  1. Consultative Mechanisms

    Policy Consultation Talks

    The Policy Consultation Talks between the two countries was established in 2000. The talks, which are held annually and conducted by the foreign offices of the two countries on the level of senior officials, aimed at discussing bilateral issues and regional and international issues of common concern.

    At the eighth (8th) round of the Policy Consultation Talks, which was held in New Delhi on 7 July 2005, both countries agreed to increase the multi-dimensional and comprehensive relations evolving between the Philippines and India.

    At the ninth (9th) round of Policy Consultation Talks held on 29-20 October 2009, both sides acknowledged their our respective aims to bring their engagement to a higher level. Both acknowledged that more avenues of cooperation be opened, particularly political cooperation and economic cooperation in areas such as agriculture, tourism, renewable energy, maritime shipping, as well as in education, and culture. New activities were also identified.

    The subjects of ASEAN-India cooperation, cooperation in the United Nations, including climate change and nuclear non-proliferation and disarmament, and emerging regional economic developments were also covered during the consultations. The Philippines and India agreed to maintain close contact, including the convening of bilateral working groups, as appropriate, in preparation for the inaugural session of the Joint Commission on Bilateral Cooperation.

    Security Dialogue The Philippines and India agreed to establish a security dialogue that would serve as a policy forum for sharing security assessments and for reviewing and giving direction to cooperation in bilateral/regional security and defense matters. The first Philippines-India Security Dialogue was held in Manila on 12 March 2004. One of the highlights of the first security dialogue was the signing of the RP-India Extradition Treaty by Department of Justice Acting Secretary Ma. Merceditas N. Gutierrez and Indian Ambassador to the Philippines Navrekha Sharma.

    At the second round of the Philippines-India Security Dialogue held on 08 July 2005, both sides agreed to establish a working group focused on counter-terrorism within the framework of the Dialogue. The Philippines proposed a declaration between the Philippines and India on counter-terrorism cooperation to complement the ASEAN-India Joint Declaration on Cooperation to Combat International Terrorism (subsequently signed by then Secretary of Foreign Affairs Alberto G. Romulo and then Minister of External Affairs Pranab Mukherjee in 2007).

    At the third Philippines-India Security Dialogue held on 29-30 October 2009, the two sides discussed the RP-India Defense Cooperation Agreement, transnational crimes and terrorism and the Implementation of Joint Declaration for Cooperation to Combat International Terrorism. Both sides also discussed the finalization of the Terms of Reference of the Philippines-India Defense Cooperation Agreement of 2006. They agreed to continue discussions on an agreement in combating transnational crimes including illicit drug trafficking.

    Inaugural session of the RP-India Joint Commission (JCBC)
    At the Inaugural Meeting of the Philippines-India Joint Commission on Bilateral Cooperation, the Philippines and India recalled that three (3) preliminary working groups for the Inaugural Session of the Philippines-India Joint Commission on Bilateral Cooperation have been held: the 1st Joint Working Group on Tourism Cooperation (04 July 2008); the 1st Joint Working Group on Agricultural Cooperation (21-22 August 2008); and the 10th Joint Working Group on Trade and Investment (21-22 November 2008).

    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 (last) meeting in New Delhi during 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 of 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.

    Both 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. Both countries 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. The Ministers 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 convene the first meeting of the JWG on Counter Terrorism later in the year. A bilateral Cultural Exchange Programme (CEP) for the year 2011-13 was also signed.

  2. Recent Exchanges of High Level Visits

    State Visit of President Gloria Macapagal Arroyo to India, 3-6 October 2007

    President Gloria Macapagal Arroyo undertook a State Visit to India from 3 to 6 October 2007, being only the second Philippine President, after former President Fidel V. Ramos, to do so. She visited Mumbai, New Delhi and Agra.

    Business was the focus of her one-day stay in Mumbai, where she delivered a keynote address at a business meeting hosted by the Confederation of Indian Industries (CII), met with key officials of existing and potential investors in the Philippines, was hosted to a lunch reception by Mrs. Rajashree Birla, Philippine Honorary Consul General A.H. and Director of the Aditya Birla Group, and received a call bv Bollywood personalities. Her visit to Mumbai culminated with a high tea with the Governor.

    In New Delhi, President Arroyo was received by India's top leaders, including President Pratibha Patil and Prime Minister Manmohan Singh, with cooperation in the pharmaceutical, IT and dairy industries, counter-terrorism, the development of alternative sources of energy, air services, and ASEAN-India cooperation topping the agenda of their meetings.

    Visit of Prime Minister Manmohan Singh, 14 January 2007

    In January 2007, Prime Minister Manmohan Singh visited the Philippines to participate in the 5 th ASEAN-India Summit and 2 nd East Asia Summit in Cebu City.

    President Gloria Macapagal Arroyo met with Prime Minister Singh on 14 January 2007 before the holding of the ASEAN-India Summit. The two leaders discussed on 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.

    Visit of the Indian President Kalam to Manila, 3-6 February 2006

    Indian President A.P.J. Abdul Kalam made a State Visit to the Philippines from 3 to 6 February 2006. The State Visit of President Kalam was meant to reciprocate President Fidel V. Ramos's State Visit to India on 2-5 March 1997.

    Indian President A.P.J. Abdul Kalam made a State Visit to the Philippines from 3 to 6 February 2006. The State Visit of President Kalam was meant to reciprocate President Fidel V. Ramos's State Visit to India on 2-5 March 1997.

 
 ECONOMIC COOPERATION

 

  1. Consultative Mechanisms

    Joint Working Group on Trade and Investment

    The 8th Meeting of the Philippines-India Joint Working Group was held in New Delhi in February 2004. This regular bilateral process reviews the status and assesses the progress of the two countries' cooperation on trade, investments, economic, technical, scientific, and technological activities.

    Joint Working Group on Agricultural Cooperation

    A Joint Working Group on Agricultural Cooperation (JWGAC) has been set up pursuant to Article IV of the signed RP-India MOU on Cooperation in Agriculture and Related Fields . There was a proposal that the first meeting of the JWGAC be held back-to-back or prior to the meeting of the Joint Working Group on Trade and Investment, since members of the former are also members of the Philippine delegation to the latter.

    Proposed Establishment of a Joint Commission for Bilateral Cooperation

    The inaugural meeting of the Joint Commission on Bilateral Cooperation further strengthened and developed theer cooperation in the trade, economic, scientific, technological and other fields of cooperation. The mechanism is co-chaired by the two countries' respective Ministers for Foreign Affairs who will meet once in two years, alternately in Manila and New Delhi.

    Both countries signed the agreement to establish such joint commission during the State Visit to India of President Gloria Macapagal Arroyo in October 2007.

  2. Investments

    The exchange of Instruments of Ratification of the Philippines-India Agreement on the Promotion and Protection of Investments was held in Manila on 29 November 2000. The Agreement, which was signed in January 2000 and ratified by President Joseph Estrada in April 2000, aims to enhance commercial, industrial, and other economic activities by providing favorable conditions for investments by nationals and companies of the two countries.

    As of January-June 2006, Indian's foreign direct investments to the Philippines amounted to US$500,000. Indian investments in the Philippines are mainly in the areas of textiles, IT, steel and Business Process Outsourcing (BPO).

  3. Trade Statistics

    In 2009, India ranked 18th as PH trading partner, 22nd as export market, and 18th as import supplier of the Philippines (source: DTI-BETP).

    Philippine exports to India increased from US$ 200.3 million worth of goods in 2009 from US$ 193.35 million in 2008. Philippine imports on the other hand, decreased in 2009 to US$ 502.3 million from US$ 615.1 million in 2008. As of November 2010, total trade reached US$ 865.12 million, which is short US$ 135 million short of the bilateral target of US$ 1 billion in total trade for the two countries.



    BILATERAL MERCHANDISE TRADE (Value in US$ Million)


    RP Trade with India
    FOB Value in US Dollars 2002-2006
    YEAR TOTAL TRADE EXPORTS TO INDIA IMPORTS FROM INDIA

    BALANCE OF TRADE

    2005 430.41 86.12 344.29 (258.17)
    2006 519.68 120.13 399.55 (279.42)
    2007 735.58 243.97 491.61 (247.64)
    2008 808.50 193.35 615.15 (421.80)
    2009 702.51 200.30 502.21 (301.91)
    Jan-Nov 2010 865.12 380.39 484.73 (104.34)

    Source: NSO
    Processed: BETP-EDP


    Philippine Merchandise Total Trade with India (in US$)
    January - June 2007
    Month 2007 TOTAL EXPORT TOTAL IMPORT TOTAL TRADE
    January 5,687,594 50,132,457 55,820,051
    February 9,608,854 34,052,371 43,661,225
    March 21,931,573 34,899,088 56,830,661
    April 19,153,402 41,968,636 61,122,038
    May 31,121,893 33,630,769 64,752,662
    June 22,775,238 32,504,691 55,279,929
    Total 110,278,554 227,188,012 337,466,566
    Source: BETP-DTI Tradeline Philippine Center

 
COOPERATION AGREEMENTS


Signed Agreements

Among the first agreements concluded by both countries were: Air Services Agreement signed in 1949, Cultural Agreement signed in 1969 and entered into force in 1973, the Memorandum of Understanding for Scientific and Technical Cooperation in Agriculture between Indian Center for Agricultural Research and the Philippine Council for Agriculture, Forestry and Natural Resource Research and Development signed in 1976; Memorandum of Agreement on Trade signed on 29 May 1979; the Basic Agreement on Scientific and Technological Cooperation signed on 8 April 1987; an Agreement on Economic and Technological Cooperation signed on 3 August 1990; the Convention on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion signed on 12 February 1990; and the Agreement for Cooperation on the Utilization of Atomic Energy for Peaceful Purposes signed on 29 April 1991.

Both countries signed the RP-India Extradition Treaty in 2004 . This is yet to be ratified by the Philippines and currently, arrangements for its ratifications are being made. A Memorandum of Understanding (MOU) between the Philippines and India concerning Air Services was signed on 21 July 2005. This MOU serves as an amendment to the existing Air Services Agreement between the Philippines and India, which was concluded in 1949. The said MOU has been ratified by the Philippine side on 19 December 2005.

During the 2006 State Visit to the Philippines of Indian President A.P.J. Abdul Kalam, four important agreements were signed, namely:

  • Agreement on Cooperation in the Field of Tourism. This agreement seeks to increase the volume of tourists from the two countries and should benefit the Philippines, India being the fifth largest outbound tourist market in the world.

  • A greement on Cooperation in Agriculture and Related Fields. The MOA seeks to promote the exchange of agricultural materials and information/technology, the exchange of agricultural scientists, experts and trainees, the organization of symposia and conferences, etc. Through this MOA, the Philippines can tap India's expertise in buffalo breeding, dairy development, and other fields where India possesses comparatively better agricultural know-how.

  • Agreement Concerning Defense Cooperation. This agreement provides a legal framework for defense cooperation between the Philippines and India and is a key component in elevating bilateral relations to a more strategic level. The objective is to enhance defense cooperation through: exchange of military training expertise and information; exchange of military instructors/observers; exchange of visits of military aircraft and military naval vessels; exchange of information that is mutually beneficial, and other spheres of defense cooperation.

  • Agreement between the Philippine International Trading Corporation and Lob International on the Importation of Pharmaceuticals. This is in line with efforts to expand the Philippines' supply base for quality medicines from lower-priced source countries like India. During the State Visit of H.E. Gloria Macapagal Arroyo to India on 3 to 6 October, 2007, the following agreements were signed:

During the State Visit of H.E. Gloria Macapagal Arroyo to India on 3 to 6 October, 2007, the following agreements were signed:

  • Declaration on a Framework of Bilateral Cooperation between the Government of the Republic of the Philippines and the Government of the Republic of India
  • RP-India Joint Declaration for Cooperation to Combat International Terrorism
  • Agreement on the Establishment of a Joint Commission on Bilateral Cooperation
  • Memorandum of Agreement on the Exemption of Visa Requirements for Holders of Diplomatic and Official Passport
  • Memorandum of Understanding on Cooperation between the Foreign Service Institute of the Philippines and the Foreign Service Institute of India
  • Memorandum of Agreement on Enhanced Cooperation in the Field of Renewable Energy
  • Memorandum of Understanding on Cooperation in the Field of Health and Medicine
  • Memorandum of Understanding Regarding the Utilization of a US$15 Million Credit Line between the Government of the Republic of the Philippines and the Export-Import Bank of India
  • Memorandum of Agreement between the Philippine International Trading Corporation and the State Trading Corporation of India Limited for Trade between the Philippines and India

TOURISM INITIATIVES

The Department of Tourism has conducted several travel events in India, to promote the Philippines as a tourist destination for Indian tourists.

With the operation of direct flights, it is hoped that the Philippines and India will be able to increase tourism between our two countries.

In 2009 and 2010, the DOT was engaged in promoting the Philippines in India via the use of familiarization tours for Indian tour operators as well as attending various marketing and promotional activities in India (e.g. 1st Philippine Sales Mission, World Travel Express Show 2010). DOT participated in the Outbound Travel Mart (OTM) in Mumbai and New Delhi on 18 to 26 February 2011. The Philippines' participation follows up the successful sales mission conducted by the DOT in December 2011 in New Delhi and Mumbai, in cooperation with Philippine Airlines. The Fair afforded an opportunity for the Philippines to promote Manila and Cebu as ideal destinations for Indian tourists, given their high-spending capacity.

According to the Department of Tourism, in 2010, a total of 34,581 Indian tourists visited the Philippines, mostly on business, and the number is expected to grow higher. Below is the total arrivals from India for the period of 2006-2010:

Year 2006 2007 2008 2009 2010
Volume 22,703 27,341 31,135 32,817 34,581
Growth% 7.93% 20.4% 13.88% 5.40% 5.38%