The Influence of Free-trade between China and Philippines to Filipino

Students

A Research Paper
Submiitted to
Prof. Tumoroh C. Brazalote
Mapua University

In Partial Fulfillment
of the Requirements in
GED105 (The Contemporary World)

By: (group members in alphabetical order)

Jofren C. Porras
Karell MI. Romero
Leoncio S. Sy

January 2020
 Abstract

Bilateral talks between countries have been benefitting those who are
involve and properly implemented this will help strengthen the relationship
between the two. Free trade agreement between China and Philippines
has been going on for your years. This paper deals with its effect on the
Filipino households, quality of products that are involve and the Future of
the local products analyzing and interpolating data surveys from the
students. Their opinions portray that Chinese import products that have
been proven to be beneficial regarding of its cheap and low quality. And
due to its abundance and quantity in our local market we are forced to
submit on this type of products despite the will to help Filipino products
thus Free-trade agreement would prove to be beneficial since it will affect
not only these imported products but also the local products that will be
involve.

Keywords: Free-trade Agreement, Bilateral Talks, local Products, local market

Data surveys

Introduction

As the products of china is becoming more abundant and is getting

manufactured a lot, the students with limited of money have bought Chinese products

sometimes without even them noticing it and as it goes the history of trading with china

and the Philippines goes long way back, it goes way long back like in thang dynasty (7 th

and 9th century AD) the two peoples of the china and the Philippines already have close

relations and have started trading with each other’s, In The Sung (960-1127 AD) It was

reported that arab traders brought the Philippines goods to china in southwestern

through the port of canton,It only culminated when Chao Ju-Kua wrote of the barter

trade between them the Chinese and the natives of now Mindoro. The Chinese became
the dominant traders in the 12th and 13th centuries during the Sung dynasty. Porcelain

and silk was the historically known product for trading between the china and the

Philippines but the Philippines also have one which we called “kamote” or sweet potato,

The introduction of our product the kamote was found in the late 1500 to Fujian

province by an overseas Chinese from changle,Fujian province who is known for trading

in Luzon, He discovered this type of food the local kamote was drought-tolerant and it

also yield high and have resistant to typhoon. And it affected china big time because it

can feed a lot of people in there at the time when they experienced abnormal weather

which is in Ming dynasty and thus caused famine due to food shortage. In the galleon

trade era about 200 million pesos was brought to the Philippines from china, the

amount of the silver dollars input was said beneficial to the Chinese social and

economic development. someone said that the Chinese merchants participated in two

kinds of markets: the first one is traditional area market, providing merchandise to

Luzon’s indigenous peoples and the second one is contemporary world market, which

was to provide merchandise to the Spanish who transported and sold them to the

American and European markets in the olden time.

It was said that the china-philippines friendly exchanges achieved a big

development after the Ming Dynasty, It was citied that the improvements in quality and

output of raw silk and silk fabrics that earned a high reputation across the world. And

now in the modern times it only affects us the Philippines especially the students, they

bought products from china because it is mass produced and it’s a lot cheaper and then

in the mean time the relations with the trading between china and the Philippines is stil
getting better and better as the days pass on. Like right now the china may import

more fruits and agricultural producrts from the Philippines and According to the PSA,

China's export receipts stood at US$ 4.62 billion, while import payments were estimated

at US$ 11.80 billion, resulting in a trade deficit of US$ 7.18 billion. Also until now the

China is still the Philippines number one trading ally, because there is a free flows of

goods, there is no also restrictions in commercial vessels and transactions,import and

export of goods from the Philippines to china, It is just increasing until now and is still

the bond is strong and lets also not forget most products are made from china so that

sometimes the students doesn’t know that they have bought a product that is made

from china and as the online shopping is blooming right now it only influences more of

the students and thus the trading between china and the Philippines is strengthen. With

the growing populations and demands of products the china will just continue on

sending products that will only increase as times goes on and as it always said the

people will always choose the cheapest one and the abundant one so the students with

limited financial will always try to save money and not only that with the history of

china and Philippines spanning from hundreds or thousands of years it is common

knowledge that the bond in trading between the Philippines and china is strong.

"Chinese President Xi Jinping emphasized his strategy to import more from the

Philippines and parity exchange between the two countries, as he met with President

Rodrigo Duterte, a Filipino authority said Friday.China plans to purchase more

merchandise from the Philippines, particularly rural and agro-based items, said Trade
Secretary Ramon Lopez, who is a piece of Duterte's legitimate assignment to Beijing."

(France-Passe,2019.)

with this it will help the trading between the china and the philippines which in

turn help the philippines and especially the locals who is also the students. "A local

organized commerce settlement will likewise open a more extensive market for imports

and fares, while empowering interests in assembling, vitality and innovation based

businesses, Exchange Secretary Ramon Lopez said in an announcement."(ABS-

CBN,2019.). And as the china have an abundant product exporting it to the philippines

it became an every day thing you can bought, like the pens or the notebooks bought by

the students it will just strengthen the trading between china and the Philippines

because the supply and demand of each other is perfect enough, "The warm ties

between the Philippines and China were reflected in the most recent exchange

information discharged by the Philippine Measurements Authority (PSA) on Wednesday,

October 10. All out Philippine fares to China were esteemed at $939.98 million or

15.3% of the all out fares for August. This is 34.4% higher from the $699.48 million

posted in a similar period a year ago. Absolute fares developed by 3.1% to $6.16 billion

in August from $5.98 billion around the same time a year ago. In the interim, China

was likewise the nation's greatest provider of imports with a 19.9% offer in August.

Import bills to China enlisted $1.92 billion in August, 28.2% higher year-on-year,

demonstrating that reciprocal exchange keeps on being tipped support of the Asian

goliath." (Rivas,2018.). furthermore, it may appear as though the china is the one just

profiting by the exchanging between nation however its not likely that on the grounds
that as it was said with the historical backdrop of China and Philippines enduring many

years it is likewise said that Philippines is profiting by this one. "China has resolved to

reinforce exchange relations with the Philippines by buying more products from the

nation, the Branch of Exchange and Industry (DTI) said. Exchange Secretary Ramon

Lopez said China's Leader Xi Jinping has emphasized the Chinese government's

approach to accomplish offset exchange with the Philippines by bringing in more

products especially, agri-based and modern merchandise during the reciprocal

gathering between the two nations."(Desiderio,2019.). "In the course of the most

recent three years, Philippine fares to China were expanding at a normal of 10 percent.

Information from the Philippine Measurements Authority indicated China was the

Philippines' greatest wellspring of imports esteemed at $21.39 billion, and fourth

biggest market for Philippine fares at $8.70 billion."(Desiderio,2019.). As you can see

the Philippines is also benefitting from this trade thus also benefitting the students,

especially the college students who will need to buy alot of things for their projects and

will be also cheap. "China is the Philippines' top exchanging accomplice the principal

semester of 2019 with an absolute exchange worth 16.43 billion U.S. dollars or 18.8

percent of the complete exchange, the Philippine Insights Authority (PSA) said on

Monday. As indicated by the PSA, trade receipts from China remained at 4.62 billion

U.S. dollars, while installment for imports was esteemed at 11.80 billion U.S. dollars,

bringing about a 7.18 billion U.S. dollars exchange shortfall."(Xinhua,2019.). As the

statistics shows the trading between them is pretty good.

 "In 2019, the Philippines imported in any event $2 billion worth of merchandise

from China, which was Manila's top wellspring of imported things, among them

acceptance heaters that are utilized to create steel."(Bergonia,2019.) rural as well as

just regarding modern we additionally import it to China. "China has remained the

Philippines' greatest exchanging accomplice in spite of the sea struggle the West

Philippine Ocean, as indicated By profession Secretary Ramon Lopez" (Kabiling,2019.)

And until now we are one of the biggest trader between china. “The Philippines has

organized commerce concurrences with China, India, Japan, South Korea, and Australia

and New Zealand under ASEAN” (Cabochan,2019.). this shows that we are under

ASEAN in trading so the philippines is benefitting alot. “Reciprocal exchange. Exchange

between the Philippines and China isn't just steady, yet in addition developing. As per

the Philippine Deparment of Exchange and Industry (DTI), absolute exchange came to

USD 14.6 billion out of 2013, which is an impressive increment from the years 2011 and

2012 and rising exchange insights demonstrate that monetary and political territories in

the two-sided relations can be compartmentalized for common advantage.”

(wong,2014.) And as times goes on it just increase and increase thus the statistics of

the trade between china and the philippines. And we also have the Executive order 814

which indicates “Changing THE Paces OF Obligation ON CERTAIN IMPORTED

ARTICLES AS Accommodated UNDER THE Levy AND CUSTOMS CODE OF 1978, AS

Altered, So as TO Execute THE 2009-2012 PHILIPPINE Timetable OF Tax Decrease

UNDER THE Ordinary TRACK OF THE ASEAN-CHINA Organized commerce Zone ON

Specific Items AND TO Actualize THE Exchange OF CERTAIN Duty LINES FROM THE
Touchy TRACK TO THE Typical TRACK Classification OF THE ASEAN-CHINA Facilitated

commerce”.(Ermita,2005.).

“The Philippine government has as of late found a way to improve its association

with China, including concurring this week to take an interest in a maritime preparing

exercise with China and different individuals from the Relationship of South East Asian

Countries (Asean).” (Carter,2018.)

Materials and Methods

This study aims to inform us how much Filipinos are affected by the free trade

with China especially when the relationship between them and the Philippines are being

threatened by the issue in the west Philippine sea. Therefore, it also aims to answer the

question on how much we actually relied on this free trade agreement especially those

local business? And How are we going to face this challenge or are we able to face

them? By conducting surveys to students on how much they rely on them and by

analyzing and using the information provided by certain medias and articles, as well as

the reliable information available in the internet this will allow us to explore significance

of the Free trade with China. We used qualitative analysis for this research. Surveys

involve collecting information, it was usually happened in the groups of people, we

know that there are different types of survey, but we used questionnaires. We directly

asked permission to the student to give us a time to conduct a survey. We encounter

some of problems because there some students don’t want to answer our

questionnaires.
 The materials that we used “questionnaires” targeted the students here in manila

that are using Chinese products. We conducted survey to twenty students to know what

the percentage of the Chinese product are they have or currently using in their daily

lives. We conducted in the different places here in manila. When we are collecting the

data we figure out that some of the participants they usually using more Chinese

products because of the price and the materials. But there are also some of the

participants doesn’t support Chinese product because they support Filipino products.

Also, by using some information from various information gather from various

articles and news articles we determine the current happening regarding from Free-

trade agreement between China and Philippines. Starting from the information

regarding how much China is exporting to Philippines, what are they are trying to

achieve through bilateral talks like demand for importation of agricultural products from

Philippines.

We also used some statistical data from top world exports to determine which

country and what places is China and they’re on the total imports made by the

Philippines and relate it to the results of the surveyed answered by the student

respondents.

By providing some graphs regarding the answers of the students we are aiming

to give visual representation of each results to further clarify and connect it to free-

trade agreement.
Results

For the first part of the survey we determined how many products does the

student have in their household note that this is just an approximation. Specifically, we

asked them in what percentage of Chinese product they have or currently using in their

daily lives. The result will show how much they are relying on Chinese products as a

whole. Since this will show how every household has been affected by foreign products

resulted by the Free-trade with china.

Result No. 1

The results show that out of 20 students that participated in the survey 5 (25%)

of them have a household have products where ¾ of what they own are Chinese

products. While 7 (35%) of them estimated they have about ¼ of products they are

using came from China and 8 (40%) of them approximated that they have about 50%.

The survey also portrayed that that none of them actually said that all their products
are made from China.

As for the 2nd and 3rd question of the survey we determine how they would rate

on how much they are using Chinese products and Filipino products in their lives. With

a scale 1 to 4 where 4 signifies that they barely use this product of either Filipino and

Chinese.

Result No. 2:

Student Rating of Filipino Products

9
8
7 The results showed that for
6
Students

5
4 Chinese Products 14 out of 20
3
2
students believe that these
1
0
1 2 3 4
products can actually satisfied
Rating
their needs while 6 of them

believe that they are not the

worse compare to other products.

Result No. 3
 For Filipino products the survey shows variation in results. Some of them think

that Filipino products are worst when compared to the Chinese products however some

of them think that somehow our products have a great quality. It can also be observed

that Chinese products are greater overall.

For the 4th question we are aiming to know what the main reason is why their

family or household use Chinese products. The result in this part would prove beneficial

since this could provide information whether how each household decide on getting

products and choose between these our products and others.

Result No. 4
 Reason why they think their family use Chinese Products

Other reasons

abundance
Reasons

quality

cheap

0 2 4 6 8 10 12 14
No. of students

For the reasons of why they think their family use Chinese products, the results

show that the main reason would be its cheap cost. While some of them think the

abundance of Chinese products could be one of the things that urges them to use this

kind of product rather than using our own. Some of them believe that there could be

another reason rather than what is given.

The 5th question aims to know what they think as a student on whether this

current issues regarding Chinese products would prove to be beneficial to their country.

Result No. 5
 Abundance of Chinese Products in the Philippines Beneficial?

0 2 4 6 8 10 12
No. of Students

Students who said Yes Students who said NO

The 6th question aims to determine the opinion of student on what would be

good for the local products in the Philippines. Determining which should be focus or

should they be done at the same time. Noting that this are opinions of students

Result No. 6

Stating the 3 ways to help local product here in the Philippines it can be observe

from the results that majority of the students think doing all of these 3 would prove to

be beneficial. But ignoring that we can see that there is a tie in either promoting or

funding local products while there is one who thinks the 1 should limit the use and

import Chinese products here in the nation.

 7th question determines the opinion of students on what they think is hindering

the local products here in the Philippines. Students view on what they think could be

the problem would help them determine in their future which should be eliminated or

solved first.

Results no. 7

Obstacles that should be address first according to the

students

Local Producers or businessman

Challenges

innovation

There are more international products than local

funds

0 1 2 3 4 5 6 7 8
No. of students

The results show that the less problem that should we focus on according to

student would be the funds. While we should prioritize addressing on the problem that

international products are more abundant here in our country. While innovating local

products and generating and supporting local products follow on what we should focus

on.

Result 8.
 Satisfisfaction Survey on Chinese Products
8
7

No. of Studends
6
5
4
3
2
1
0
Quality Quantity Cost Availability
Category

Extremely Disasstisfied Somewhat Disasstisfied

Neither Satisfied or Dissastisfied Somewhat Satisfied
Extremely Satisfied

For Chinese products in most category the students are neither satisfied nor

dissatisfied. For this product, the students are more into its availability given that it has

the highest peak of satisfaction while they are mostly dissatisfied on its quality and

quantity. Its cost however shows that the student is actually extremely satisfied for this

product. For each category it can be observed that the opinions of students actually

vary but their extreme dissatisfaction are actually negligible according in the graphs.

Result 9.
 Satisfaction Survey on Filipino Products
9
8
7
No. of Studends
6
5
4
3
2
1
0
Quality Quantity Cost Availability
Category

Extremely Disasstisfied Somewhat Disasstisfied

Neither Satisfied or Dissastisfied Somewhat Satisfied
Extremely Satisfied

To compare contrast this to Filipino products, the same satisfaction survey was

performed. It can be seen that the students are all satisfied for all categories for the

Pinoy products. While their dissatisfaction is only minimal where it maximizes on the

quantity of the products and its availability.

Discussions

Discussing the results, it is known that for years Philippines and China has been

trading a lot, and due to some Free-trade agreements according to George Manzano

(2019), we are expected to benefit from this FTA depending on the agreements that

will be available because this will give us more access that will result to gradual gain

that will be good in the interest of the Philippines. But even before that Chinese

products has always been a significant factor to Philippine economy. As seen from

above the results shows that every student has owned a significant number of Chinese

products in their households. Due to this product starting from the essential ones to the

luxurious ones, it helps every family of Filipino students to get by in their daily lives. But
what is it in their products that every family in the Philippines own this product? Daniel

Workman (2019) of World Top Exports stated that China has been one of the top 4

trading partners of the Philippines where 12.9% of total exports of the Philippines came

from. Along with this, the influence of the Chinese in local market kept the abundancy

of their product here in the Philippines. And due to their cost’s Filipino prefer to buy

their products compare to others even when they must sacrifice the quality of the

products. This situation can actually be observed on the response of the students

regarding on their satisfaction on Chinese products. Whereas compared to the Filipino

products their cheapness is one of the major factors on deciding on consuming such

products. Other than its cheapness, the availability of the products also proves that it

affects on how they view certain products since it is availability is high it is very easy to

get a new one even when the products got destroyed. This is why most Filipino

households has surrendered to this quality of products which shows not only the

dependent of the Family of the country but the dependency of some of the economy of

the Philippines in China.

How does it actually relate to the free-trade agreement? Well the free-trade

agreements between China and Philippines actually helps in flow of Chinese products in

our country. Quality control could be limited, or won’t be necessary, tariffs could be

reduced in result will lessen the quality and on the other hand would increase both its

quantity and availability for certain areas. The quantity would narrow the choices while

the availability would force the consumers to buy them. Richmond Mercurio (2018) said

in one of its article As of late China is taking a big step further so that it will become
Philippines top importer while on 2019 of August Pia Ranada (2019) stated in his article

that China would increase its Agricultural products importation so that they will also be

able balance the trade with our country. This benefit us a lot since not only will it help

both the local products by presenting a demand but as well as minimize the wasted

products due to its characteristics of not being sold due to the quantity of their product

here.

Is there a chance for Filipino products to shine again? Well citing the survey

results it can be seen that future generations aka students view our products to have a

potential. Since overall their view of this products and their passion about helping the

Filipino products is evident. They know what the problem with the current local

products and this opinion could prove to be essential when they have to face this kind

of problems on their life.

Conclusion

To conclude this research, due to the quality of Chinese products and its cheap

cost their abundancy and prosperity in Philippines local market has been proven to be

both beneficial and a disadvantage to both students and their family. It has been

proven beneficial since throughout the decades this product helps us in our daily lives

even though their quality is to be mocked off. Due to this characteristic our choices

have been narrowed down leaving us no choice to buy them. When compare to other

local products though quality is less than, we prioritize the cheapness.

 Due to the effects of Free-Trade agreement between China and Philippines for

the past years, one step at a time we we’re able to lessen this burden whereas the

balancing of Trade between two countries has been significant. Due to the results of

the survey we we’re able to know that Philippines products are still valued even by the

students. Their view of the Chinese products is not overall negative since some of them

believe that using them is much more efficient and by accepting this we could actually

improve our own economy if properly planned. If somehow, we we’re able to do this in

our own products where the price can be reduced while only affecting the quality in a

minimal scale, we would be able to meet the demands of our own economy and

possibility and percentage of our products could have an international aspect like any

other products. This Free-trade agreement would someday affect the products that we

would be consuming for the future that’s why getting the opinions of the students now

could affect when they became an adult citizen of the country.

 References

ABS-CBN News (2019). Philippines poised to benefit from China-led free trade pact.
Retrieved from https://news.abs-cbn.com/business/11/06/19/philippines-poised-
to-benefit-from-china-led-free-trade-pact
Daniel Workman (2019) Philippine Top Trading Partners. Retrieved from
http://www.worldstopexports.com/philippines-top-import-partners/
Pia Ranada (2019). China to import more Philippine agricultural goods, Xi tells
Duterte retrieved from https://www.rappler.com/business/238908-xi-tells-
duterte-china-open-importing-more-agricultural-goods-philippines
Rihmond Mercurio (2018). China aims to be top Philippine goods importer .
Retrieved from https://www.philstar.com/business/2018/03/16/1797069/china-aims-
be-top-philippine-goods-importer

Atty. Ann Claire C. Cabochan. (July 18, 2019) Philippines - Trade Agreements
Retrieved from https://www.export.gov/article?id=Philippines-Trade-Agreements
Andrea Chloe A. Wong (July 2014) Philippines-China Relations: Beyond the
Territorial Disputes. Retrieved from http://www.fsi.gov.ph/wp-
content/uploads/2019/07/2014-Vol-1-No-3-July-Philippines-China-Relations-
Wong.pdf?
fbclid=IwAR2B095a_50r92PZKQpTaxKMpdyUYmsNAcPEaxmR19un2cByZ7nAZqwt
SLk
EDUARDO R. ERMITA (June 30, 2009) EXECUTIVE ORDER NO. 814. Retrieved from
https://tariffcommission.gov.ph/eo-814
John R. Carter (October 12, 2018) As US-China trade war intensifies, Philippines
seeks to balance ties and even benefit from mounting tensions . Retrieved from
https://www.scmp.com/news/asia/southeast-asia/article/2168207/us-china-
trade-war-intensifies-philippines-seeks-balance
Michelle Ong (2018) China seeks more exports from Philippines. Retrieved from
https://news.abs-cbn.com/business/03/15/18/china-seeks-more-exports-from-
philippines?fbclid=IwAR2kQNQp-
8CDmJmBqtmz8HGtSqyK35hk7GXVUnWi5ld39QIGQtbvT9TTtJg
Genalyn Kabiling (2019) China still PH’s No. 1 trading ally. Retrieved from
https://news.mb.com.ph/2019/06/22/china-still-phs-no-1-trading-ally/?
fbclid=IwAR3C8GpcveBRbnoshtLH8P8xG0otSzE7iwowi0nQMK-
u9hmbDRiVw05KLhU
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authority. Retrieved from http://www.xinhuanet.com/english/2019-
 10/14/c_138471241.htm?fbclid=IwAR2CmQzV4o9wXNTfXpFu5DPhJ
eBUCWz5X422Qm5aM9J0S9qIZiwEQRW0nkg
Appendices
GED Research Survey

Topic: Free-trade with China and Philippines

Name: ___________________

Contact No: _______________

---------------------------------------------------------------------------------------------------------------------
---------------------

Please encircle the letter of your corresponding answer.

1. How many Chinese products that you are currently using?

a. 25%
b. 50%
c. 75%
d. 100%

2. How would you rate the Chinese products from 1 to 4 (4 being the lowest)?
a. 1
b. 2
c. 3
d. 4

3. How would you rate the Filipino products from 1 to 4 (4 being the lowest)?
a. 1
b. 2
c. 3
d. 4

4. What is the main reason that your family is using Chinese Products?
a. Cheap
b. Quality
c. Abundance in the local market
d. None of the choices
 5. Do you think that the abundance of Chinese products is beneficial to Philippines?
a. Yes
b. No

6. As a student which of the following do you think is the good for the local products
Philippines?
a. Limit the use and import of Chinese products
b. Funding the generation of local products.
c. Promote the local products nationally
d. All of the above

7. Which of the following you would consider an obstacle for the local products in the
Philippines?
a. Funds
b. There are more international products than local
c. Innovation
d. Local producers or businessman

Kindly put a Check according to how satisfied are you for the following products

Survey satisfaction for Chinese products:

Extremely Somewhat Neither Somewhat Extremely

Dissatisfied dissatisfied satisfied or satisfied satisfied
dissatisfied

Quality

Quantity

Cost
Availability

Survey satisfaction for Filipino products:

Extremely Somewhat Neither Somewhat Extremely

Dissatisfied dissatisfied satisfied or satisfied satisfied
dissatisfied

Quality

Quantity

Cost

Availability

II. Respondents