Posted May 21st, 2012 by & filed under Business.

The government and the private sectors assured that the tension over the disputed Scarborough Shoal in the West Philippine Sea will have no significant impact on the country's tourism industry and trade relation to China.

Board of Investments and Trade Assistant Secretary Felicitas Agoncillo-Reyes said in an interview that the row between Manila and China had the respective investments in the two countries.

"Honestly, there's no negative impact. Although, China's investments here are not that large, I think they are number eight in terms of total direct investments. In fact, Manila has more investments in China. That is one of the reasons the Chinese trade department sent an investment advisor. This is the first time… This is really a sign of friendship, goodwill," Agoncillo-Reyes said.

Of the country's total foreign direct investments of $850 million in the first two months of the year, equity capital infusion came mainly from the United States, Australia, Japan and Kuwait.

The sectors that benefited from these inflows were the manufacturing, wholesale and retail trade, real estate, financial and insurance services, mining and quarrying, and information and communication.

Agoncillo-Reyes also noted that China's stringent regulations imposed on shipment of bananas from the Philippines were bloated by the media.

"It's not as much as the press would say. It's just a question of regulation," Agoncillo-Reyes said.

University of Asia and the Pacific professor and economist Victor Abola was optimistic the tension in Scarborough Shoal would have no impact on the country's tourism and trade sectors.

"Let's face it. At present, the Chinese tourism to the Philippines is still very small. They will cancel it for a while, that's the growth that we lose. So, I don't think that is significant," Abola said in an interview.

Data from the Tourism Department showed that visitor arrivals to the Philippines hit an all-time high of 1.148 million in the first quarter, up 16 percent from 989,501 year-on-year. Chinese arrivals comprised over 8 percent, or 96,455 visitors, making them the fourth-biggest generating markets for the local tourism industry.

"The potential is that we will lose an X percent, but that's the way it goes. We just have to prefer for the worse-case scenario," Abola said.

Philippine Travel Agencies Association president Aileen Clemente said there was no clear assessment of the extent of the cancelation of several Chinese travel agencies and airline yet.

"The factors include current bookings, forward bookings, if bookings are considered canceled or suspended. So far, we know four chartered flights per week and China Southern's reduction of flights are what we are aware of," Clemente said in an e-mail.

(Published in the Manila Standard Today newspaper on /2012/May/21)