Philippines-India bilateral relations on the rise: From rice and fintech to education and electronics

GREATER COOPERATION: Philippine-India relations have seen positive developments in various sectors. Both countries have made efforts to enhance their economic ties, with bilateral trade steadily growing, with India exporting various goods such as pharmaceuticals, textiles, and machinery to the Philippines. Furthermore, there has been an increase in Indian investments in the Philippines, particularly in sectors like IT, infrastructure and business process outsourcing (BPO).

HISTORICAL, CULTURAL TIES: The Philippines and India share historical and cultural ties dating back to ancient times. This link serves as a foundation for the current diplomatic relations between the two nations. In August 2022, PM Modi spoke by phone to Philippines President Marcos Jr. The Indian PM expressed his desire to work closely with the administration of President Marcos Jr. to improve bilateral ties. Taking to Twitter, PM Modi stated, “Pleased to speak with President @bongbongmarcos today. I conveyed my best wishes to him for a successful tenure as the President of the Republic of the Philippines.”

TIES: India and the Philippines formally established diplomatic relations on November 26, 1949, shortly after both countries gained independence (Philippines in 1946 and India in 1947). The year 2019 marked the completion of 70 years of diplomatic relations between the two nations. Relations between the two countries have been friendly and problem-free. There are strong historical shared values: anti-colonialism, South-South cooperation, a strong democratic polity, an independent judiciary and press, and the wide use of the English language. The full potential of the relationship between the two countries has yet to be attained. This 2023, the Philippines and India is expected to continue to be the fastest-growing economies in Asia-Pacific at 6 percent, thanks to a strong labor market and upbeat consumer demand, according to Moody’s Analytics.The research firm said this was the prevailing outlook despite the economic slowdown elsewhere due to political tensions.

INTERNATIONAL DIPLOMACY: The Philippines and India have cooperated in various international organisations and forums, such as the UN and the Association of Southeast Asian Nations (ASEAN), to address global challenges and promote mutual interests. On August 25, 2023, India and the Philippines concluded negotiations on bilateral Treaty on Transfer of Sentenced Persons (TTSP) and Mutual Legal Assistance Treaty (MLAT). It marked what officials said was a "significant progress" towards finalising the texts. The move is aimed to Institutionalise legal and judicial cooperation between the two nations.

PARTNERSHIP: The Philippines and India have recently strengthened their strategic partnership, especially in the field of defence and security. They have engaged in dialogues and agreements to enhance defence cooperation, maritime security, and counter-terrorism efforts in the Indo-Pacific region. The participation of officers of the armed forces of both countries in various specialised training courses in each other's countries has intensified, as have visits by National Defence College delegations, including the first ever NDC visit from the Philippines to India this year. File photo shows Philippine Army vice commander Maj. Gen. Reynaldo M. Aquino (center left) and IAF-AWC 48th Higher Command Course and delegation head, Maj. Gen. Mandip Singh (center right). The two sides vowed to strengthen each other's capabilities, during a meeting at the Army headquarters in Taguig City on Sept. 26, 2019.

FROM MEAT, TO MASALA, TO MISSILES: India is one of the top supplies of beef and rice to the Philippines, but the trade relations go beyond food. On January 28, 2021, the Philippines received the Indian BrahMos Aerospace Pvt Ltd's proposal worth $374.96 million to supply a shore-based Anti-Ship Missile (ASM) System Acquisition Project. The BrahMos, with a range of 290 km, is a shore-based anti-ship supersonic cruise missile. It’s the first major military export by India. The Philippines signed a pact with Brahmos Aerospace Pvt Ltd for the supply of three batteries of its missile system for the Philippine Navy. The BrahMos was developed by India jointly with Russia.

PEOPLE-TO-PEOPLE LINKAGES: Both nations promote cultural exchanges and educational ties. The Philippines is home to a significant Indian expatriate community, and Indian culture and cuisine are increasingly popular in the Philippines. Educational collaborations, such as scholarships for Filipino students to study in India, have also been established. There’s a doctoral fellowship in India for ASEAN. The internationally-renowned Indian Institutes of Technology (IITs) offer scholars from ASEAN countries PhD fellowships under the “Doctoral fellowship in India for ASEAN” programme. When selected, scholars will be able to complete their Ph.D. with funding from the Government of India. The funding includes a monthly stipend and an annual research grant for up to 5 years of their PhD program.

EDUCATIONAL COLLABORATION: A wide-ranging, development and educational collaboration between Indian and Philippine entities forms a key part of the vibrant bilateral partnership. MoUs between Indian and Philippines’ academic entities have been signed, including the Tata Institute of Social Sciences (TISS) Mumbai — with Ateneo De Manila University (ADMU). Scholarships had been offered to students from the Philippines to pursue studies in India. The Study In India (SII) programme is a flagship project introduced by India's Ministry of Education (MoE), allowing students from the Philippines to experience cutting-edge disciplines like STEM, Law Management, Humanities, as well as niche courses like Buddhist Studies and Yoga, allowing students access to diverse courses from India's top institutes. There are also thousands of Indian students attending Philippine universities. https://studyinindia.gov.in/about-study-in-india-programme

INFRASTRUCTURE: Shambhu S. Kumaran, Ambassador of India to the Philippines, with Department of Transportation Secretary Jaime J. Bautista and Chairman of the Philippine National Railways Michael T. Macapagal, taken on June 19, 2023. On Wednesday (September 6, 2023), the Philippines announced that a $3-billion proposal to modernise the main international airport in the Philippines has attracted three bidders, including India's GMR Group. India's GMR group has been operating an airport on the Philippine tourism island of Cebu. "We want somebody who has experience in operating an airport ... and, of course, with a very good financial background. Those are two major requirements," Bautista said in an interview on the sideline of an ASEAN summit in Indonesia.

CLOSER TIES: India has provided humanitarian assistance to the Philippines in times of need, particularly during natural disasters. Such gestures of solidarity have contributed to the friendly relations between the two countries. While the bilateral relationship between the Philippines and India continues to evolve, both nations are committed to fostering stronger ties across various sectors, including trade, defense, culture, and diplomacy. These ties deepen as both countries recognize the potential for mutual growth and cooperation in the years ahead. Philippine and Indian military officials hold the 4th Philippines-India Joint Defence Cooperation Committee and the 2nd Service-to-Service Meetings in New Delhi from March 29 to March 21, 2023.

INFRASTRUCTURE FINANCE: The Philippines is also seeking financing to upgrade four other airports — on Busuanga island, Zamboanga city, Sanga-Sanga island and General Santos city. It will also build a new airport in Brooke's Point town on Palawan island. The Philippines is also seeking funding for three railway projects: Subic-Clark Railway Project, the Philippine National Railways South Long-Haul Project and the Davao-Digos segment of the Mindanao Railway Project.

FINTECH COOPERATION: On June 19, 2023, a memorandum of understanding (MOU) was signed between India and the Philippines to boost bilateral collaboration in fintech — to improve digital financial services to consumers. Philippine Finance Secretary Benjamin E. Diokno and India's Ambassador to the Philippines Shambhu Santha Kaman signed the MOU at the Department of Finance (DOF) office in Manila. This step, comprises the formation of a joint working group (JWG) on fintech with the Department of Economic Affairs (DEA), Ministry of Finance of India. The Philippine central bank (Bangko Sentral ng Pilipinas, BSP) reported an unprecedented 5,000 per cent spike in digital payments in 2021 at the pandemic’s height.

JOINT WORKING GROUP: The JWG will promote cooperation in the development of fintech solutions for the business or financial sectors, facilitate intergovernmental discussions on the exchange of best practices, and lead the development of international standards by producing an international version of application programming interfaces (APIs). Fintech's influence on the Philippine economy grew during pandemic lockdowns, as the use of cashless transactions increased as customers raised awareness of systems like PLDT’s Maya and Globe’s GCash.

TOP PHILIPPINE EXPORTS TO INDIA: In 2022, the top 5 exports of Philippines to India include electrical and electronic equipment ($200 million), machinery ($146 million), pearls/precious/stones/meals/coins ($81.35 million), optical/photo/technical/medical apparatus ($36.97 million), and lead ($36.97 million), according to Trading Economics.

RICE EXPORTS: India sends its grain to more than 140 countries, making it the world's biggest rice exporter, or nearly 40 percent of global rice trade in 2022. India’s rice exports to Philippines hit $30.19 million during 2022, according to the UN COMTRADE database on international trade.