Philippines Look To Malaysia For Halal Boost

BILATERAL TRADE

Philippines Look To Malaysia For Halal Boost

The Philippines trade secretary Ramon Lopez is confident on the growth prospects of the halal market and it is looking to Malaysia for expertise and partnership.

Ninety percent of the 107 million population in the Philippines are Catholic. Yet, the country’s trade secretary Ramon Lopez is feeling quite upbeat on the growth prospects of the halal market, and he is looking to Malaysia for expertise.

“Malaysia is the leader in terms of developing halal products. They can teach us a lot on how to grow this market,” says Lopez, during a visit to Kuala Lumpur last week.

“We are looking forward to more partnerships, not necessarily joint ventures - we are open to one - if not, technology assistance and partnerships,” he adds.

The Philippines, under a new halal export development and promotion act, is looking to capture a bigger slice of the halal segment -  which stands at USD3.5 trillion dollar globally. The Philippines currently contributes five percent of the global halal trade.

I believe in the potential of halal as it projects a good image, not necessarily just limited to religion but also a lifestyle

Food and beverage is a key export sector for the Philippines. The country is also a major supplier of raw ingredients in the world market, including fresh and processed marine products. So, it is beneficial for Filipino companies seeking to have wider access to Muslim markets to have halal certification.

Meanwhile, when asked if about the demand appetite among Filipinos for halal products, Lopez says a rising middle income with higher purchasing power, coupled with increasing demand for products that emphasises on purity and cleanliness, will drive the segment’s growth.

“I believe in the potential of halal as it projects a good image, not necessarily just limited to religion but also a lifestyle.”

“Halal projects a very good, healthy, clean and pure image that can be marketed worldwide, not only in the Philippines,” says Lopez. “Even for services, halal restaurant and tourist resorts are limited right now.”

There are 11 million Muslims in the Philippines, making up about 10 percent of its population.

"We are welcoming suppliers of halal products into supermarkets. We have also met with retailers and encouraged major supermarkets in the country to build more shelves, or have a bigger corner for halal products." 

“Just like Singapore, the Muslim community is around 10 percent. Yet they are promoting halal supermarkets, dedicated just for halal products. That’s the type of programme we want to initiate in our country,” say Lopez.

During the group interview with Lopez, he also commented on Sabah’s decision to lift a barter trade ban with Indonesia and southern Philippines starting January 1, 2019. (The ban was instituted in 2016 following a spate of cross-border kidnappings.)

Lopez says the move is timely as President Rodrigo Duterte is looking to boost development, economic activity and connectivity in Mindanao. Here, Lopez talks about improving the livelihood of the Sulu and Tawi-Tawi communities through rebuilding trade with Sabah.

Rebuilding Trade With Sabah

Lopez adds that the country’s move to liberalise the economy by lifting foreign ownership restrictions in certain industries will stimulate FDI, and hopefully, attract more Malaysian companies to set up businesses in the Philippines.

Duterte’s administration wants to reduce the minimum capital required for foreign retailers to set up shop in the country from USD2.5 million to USD200,000. This move is expected to enable entry of more foreign firms, particularly in sectors that are still dominated by local players, including food and beverages.

Malaysia is the Philippines’ 10th largest trading partner. Last year, the countries’ two-way trade increased 26.2 percent to USD 5.94 billion. Malaysia is the second largest investor in the Philippines among the ASEAN countries, with foreign direct investment (FDI) of RM196 million in 2017.

Relaxation of Foreign Ownership

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