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 II.  BILATERAL TRADE WITH THE PHILIPPINES
     Value in US$ Million

In 2006, KSA ranked 12th as trading partner of the Philippines, 29th as export market and 7th as import supplier.  In the Middle East region, the Kingdom ranked 3rd as export market and 1st as an import supplier

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• The unified customs tariff for the Gulf region was approved in Riyadh during the 20^th Summit of the Arab Gulf Cooperation Council in November 28, 1999. Hence, a set a common tariff ranging from  5.5 to 7.5 per cent was implemented in 2005.
  
  

• The Gulf Cooperation Council (GCC) comprised of Saudi Arabia, United Arab Emirates, Bahrain, Kuwait, Oman, and Qatar, also envisioned a common market with a single currency called the gulo to take effect by 2010. The Philippines could start positioning itself based on this proposal.
  
  

• The Saudi Arabian Government has given the green signal for developing the Kingdom's re-export trade. In a circular issued by the Saudi Port's Authority, the government has freely allowed transit trade. Under the rules, the port charges and related cost have gone down and consequently, the Saudi importers can now enter into large transit trade for neighboring countries at competitive rates. Philippine manufacturers and exporters could take advantage of this development.
  
  

• Telecommunications equipment & services - Telecommunications services remain one of the most dynamic sectors in Saudi Arabia .  Opportunities exist in the broadband sector where Saudi Telecommunications Company has ambitious plans to expand and upgrade its telecommunications services based on the latest broadband technologies.
  
  

• Education and Training Services (EDS) - Training needs are increasingly becoming important as more high school and university graduates enter the labor market.  Industry sources expect training requirements to grow five percent per annum up to 2008.  Some factors contributing to this rapid increase include:   

A stringently enforced Saudization program. (The Saudi Arabian  Government's (SAG) plan to replace 60 percent of the estimated six million expatriate workers with Saudi nationals)

The number of school/university graduates is growing rapidly.

•  Auto Parts and Service Equipment (APS) -  Saudi Arabia remains one of the largest import markets for motor vehicles, auto parts and service equipment in the Near East.  It is the largest market for automobiles among countries of the Gulf Cooperation Council (GCC), which includes Saudi Arabia , Kuwait , Qatar , Oman , Bahrain , and the United Arab Emirates .  Most Saudi households have at least two vehicles.  Vans and carryalls are popular with Saudi families, as are four-wheel drive recreational vehicles.  Another vehicle commonly used by Saudi households is the nine-passenger suburban.  Although some spare parts are manufactured locally under license, the bulk of automotive parts are imported.  As more new car makes, models and advanced technologically are introduced, the Saudi spare parts market will also evolve.  Suppliers of spare parts should take advantage of this opportunity.
  
  

• Processed fruits and vegetables -  The Saudi market for processed fruits and vegetables is massive.  The growth of supermarket food sales is helping to broaden the market., and good market growth is expected to continue.  Insufficient local fruit and vegetable output suggest that a significant demand for processed fruits and vegetables will continue to be met by imports. 
  
  

• Snack Foods (excluding nuts) - Latest official figures indicated that more than 60 percent of the Saudi population is in their teens, which as a group, are heavy consumers of snack foods.  Products focusing on Saudi consumers' preferences, which tend to favor sweeter items, generally find better market reception.
  
  

• The Kingdom remains as an attractive market for ethnic foods and other Philippine food exports due to the big number of Overseas Filipino Workers (OFWs) and other Asian expatriates in the Kingdom, as well as, the growing acceptance by the nationals. However, recent developments in the Kingdom have created trade barriers that will surely slow down the entry of certain food products to the Kingdom. The following issues should be addressed by the proper Philippine authorities in order to maximize the potentials of  the Saudi food market:

1. Saudi government's requirement for a certification on non-use of Genetically Modified Organism (GMO) in Philippine food products.
   
   

2. Recent implementation of the Kingdom of Saudi Arabia's Health Analysis Control Points (HACCP) in all slaughter houses of all kinds including the equipment used in meat production, as a new provision of the Saudi Arabian Standards Organization  (SASO).
   
   

3. Ban on soya products found to be containing traces of 3-monochloropropane-diol (3-MCPD).
   
   

4. Ban on noodles and fruit juices products which contain tartrazine .

Source:  www.export.gov

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1. http://www.odci.gov/cia/publications/factbook/ -  Market information on demography and economic indicators.  
   
   

2. http://www.riyadhchamber.com - The umbrella organization of the Kingdom of Saudi Arabian Chambers of Commerce and Industry
   
   

3. http://saudinf.com - the Saudi Arabian Information web site, is designed to help those who wish to do business in or with Saudi Arabia

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