Named after the ruling Al Saud family, which came to power in the 18^th century, the country includes the Hijaz region – the birthplace of the Prophet Muhammad and the cradle of islam. This fact, combined with the Al Saud’s espousal of a strict interpretation of Sunni Islam known as Wahhabism, has led it to develop a strongly religious self-identity.

Saudi Arabia was established in 1932 by King Abd-al-Aziz – known as the Lion of Naid – who took over Hijaz from the Hashemite family and united the country under his family’s rule. Since his death in 1953, he has been succeeded by various sons.

The Al Saud dynasty’s monopoly of power meant that during the 20^th century successive kings were able to concentrate on modernization and on developing the country’s role as a regional power. It has always been in the ruling family’s interests to preserve stability in the region and to clamp down on extremist elements. To this end, it welcomed the stationing of US troops in the country after Iraq's invasion of Kuwait in 1990.

The leadership's refusal to tolerate any kind of opposition may have encouraged the growth of dissident groups such as Osama Bin Laden's al-Qaeda, which benefited from popular resentment against the role of the US in the Middle East.

After the terrorist attacks on New York and Washington of 11 September 2001 - carried out mainly by Saudi nationals - the Saudi authorities were further torn between their natural instincts to step up internal security and pressure to allow a greater degree of democracy.

In 2003 suicide bombers suspected of having links with al-Qaeda killed 35 people - including a number of foreigners - in the capital Riyadh. Some Saudis referred to the attacks as their own 9/11. Since then, demands for political reform have increased, as has the frequency of militant attacks, some of them targeted at foreign workers.

Municipal elections in 2005 were a first limited exercise in democracy. But political parties are banned - the opposition is organised from outside the country - and activists who publicly broach the subject of reform risk being jailed.

• Population: 25.6 million (UN, 2005)
• Capital: Riyadh
• Area: 2.24 million sq km (864,869 sq miles)
• Major Language: Arabic
• Major Religion: Islam
• Life Expectancy: 70 years (men), 74 years (women) (UN)
• Monetary Unit: 1 Riyal = 100 halalah
• Main Exports: Oil, gas, cereals
• GNI per capita: US$10,430 (World Bank, 2005)
• Internet Domain: .sa
• International Dialing Code: +966
• Head of State: King Abdullah Bin Abdul Aziz Al-Saud

Saudi Arabia has been ruled since its foundation by the Al Saud dynasty. King Abdullah succeeded the late King Fahd, his half brother, in August 2005. As crown prince, Abdullah had been the effective ruler of Saudi Arabia since the former king suffered a stroke in the mid-1990s. He became heir to the throne in 1982, commanded the powerful National Guard and was considered to be the most influential figure in the country. He is a former mayor of Mecca. His son, Mutib, is deputy commander of the National Guard.

He is seen as being untainted by corruption - giving credibility to his drive to stamp it out - and to favor reforms which are balanced with a respect for Saudi traditions.

Regarded in the Arab world as a supporter of wider Arab interests, he has criticized US support for Israel and Israel's occupation of Palestinian territory.

King Abdullah is believed to have been born in 1924. He received a traditional religious education and is close to the Saudi tribal way of life, often spending periods of time in the desert.

Saudi Arabia, though a pioneer of pan-Arab satellite television, has long had one of the most tightly-controlled media environments in the Middle East. Criticism of the government and royal family and the questioning of religious tenets are not generally tolerated.

But by 2003 there were signs of increasing openness, with some formerly taboo topics receiving press and TV coverage. The September 11 attacks on the US and instances of domestic militancy were said to have brought about a bolder and more candid reporting.

The state-run Broadcasting Service of the Kingdom of Saudi Arabia (BSKSA) is responsible for all broadcasting. It operates four TV networks, including news channel al-Ikhbariya. The minister of culture and information chairs the body which oversees radio and TV operations.

Private radio and TV stations cannot operate from Saudi soil, but the country is a key market for pan-Arab satellite and pay-TV broadcasters. Saudi investors are behind some of these networks, including Dubai-based MBC and Bahrain-based Orbit. Viewers in the east can pick up TV stations from more liberal Gulf neighbours.

Saudi newspapers are created by royal decree. There are 10 dailies and dozens of magazines. Pan-Arab papers, subject to censorship, are available. Newspapers tend to follow the lead of the state-run news agency on whether or not to publish stories on sensitive subjects.

The government has invested heavily in security systems to block access to websites it deems offensive, said to range in subject matter from religion to swimwear. Many internet users are said to be women, possibly a result of restrictions on their movements.

The press:

Al-Watan - Abha-based daily

Al-Riyadh - Riyadh-based daily

Okaz - Jeddah-based daily

Al-Jazirah - Riyadh-based daily

Al-Sharq al-Awsat - Riyadh-based daily

Arab News - English-language

Saudi Gazette - English-language

Television:

Saudi TV - state-run, operates four networks

Radio:

Saudi Radio - state-run

News agency:

King Abdullah was proclaimed the 6^th King of the Kingdom of Saudi Arabia and adopted the title of Custodian of the Two Holy Mosques when the former Custodian of the Two Holy Mosques King Fahd Bin Abdul Aziz Al-Saud passed away due to illness on 1 August 2005.

Date of Birth : 1924

Place of Birth : Riyadh, Kingdom of Saudi Arabia

Academic Qualification : King Abdullah’s first instructor was his father, the late King Abdul Aziz Ibn Abdul Rahman Al Saud, the founder of the Kingdom. At his father’s school, King Abdullah received his experiences in the fields of government, politics, administration and leadership. Influenced by his father, the founder of the modern Kingdom, he developed a profound respect for religion, history and the Arab heritage. His years spent living in the desert with Bedouin tribes taught King Abdullah values of honor, simplicity, generosity and bravery, and instilled in him the desire to assist in the development of his people.

King Abdullah also received his learning from senior religious scholars and thinkers.

King Abdullah received culture from various readings of books. He viewed reading as a method of understanding the era of culture, theories and sciences. In view of his interest in reading, he established the King Abdulaziz Public Library in Riyadh and its sister library in Casablanca, Morocco.

Former Position/Title : Crown Prince and First Deputy Prime Minister

Career / Appointments :

- Commander of the National Guard, 1962
- Second Deputy Premier and Commander of the National Guard, 1975
- Crown Prince, Deputy Premier and Commander of the National Guard,1982
- Chairman of the Family Council
- Chairman of the Economic Supreme Council
- Deputy Chairman of Supreme Council for Petroleum and Minerals Affairs
- Chairman of Prince Abdullah Ibn Abdul Aziz Foundation for His Parents for Developmental Housing
- Chairman of King Abdul Aziz and His Companions Foundation for the Gifted
- Custodian of the Two Holy Mosques, 1 August 2005

Contributions : King Abdullah has been greatly interested in Arab and Muslims’ affairs and has been keen on their unity.

Inaugurated numerous projects in Riyadh, Makka Inaugurated numerous projects in Riyadh, Makkah, Taif and the Eastern Province, 2004

Monitored election process for the Kingdom’s municipal councils, 2005

Travels : Visits as Crown Prince – France, 2005; Austria, 2004; Russia, 2003; Germany, 2001; United Nations Millennium Summit, 2000; Brazil, Argentina, Venezuela, 2000

World Tour in 1998 to Britain, France, China, Japan, South Korea, Pakistan

Head of Saudi delegation to International conferences – Summit Meeting of the OIC, Malaysia, 2003; Arab-US Summit, Sharm-Al-Shaikh, 2003; Summit of the League of Arab States, Beirut, 2002

Visits to the USA – 1976 as Prince, 1987, 1998, 2000, 2002 and 2005 as Crown Prince

Interests and Concerns :

- Defense of Arab and Islamic Issues
- Achievement of world peace, stability and security
- Peace in the Middle East and the plight of the Palestinians
- Condemnation of the taking of innocent Lives
- Denunciation of deviant groups that Falsely claim to be Islamic

In 1985 Philippine Ambassador to the Kingdom of Saudi Arabia, Mr. Mauyag Mohammad Tamano, signed the Land Acquisition Agreement on behalf of the Philippines. The agreement formalized the acquisition of the land for the Embassy Chancery and the Ambassador’s residence.

In 1990, Philippine Ambassador to the Kingdom of Saudi Arabia, Mr. Abraham Rasul, led the groundbreaking ceremonies on the occasion of the 94^th anniversary of the Declaration of Philippine Independence.

In 1996, Philippine Ambassador to the Kingdom of Saudi Arabia, H.E. Romulo Espaldon, led the inauguration of the new Embassy Chancery and the Ambassador’s residence.

The current Ambassador, Mr. Bahnarim Guinomla has been transferred to Ankara and will leave on 24 April 2006. Ms. Germinia V. Aguilar-Usudan will be Charge d’Affaires until the arrival of a new ambassador.

The Saudi mission to the Philippines was opened in Manila in 1974. Ambassador Mohammed Ameen Wali currently heads the mission.

The Philippines and Saudi Arabia share common interests in international and multilateral organizations. They have been on the same side on many issues in the United Nations and other international fora. On many occasions, both countries have supported each other’s candidatures in various UN agencies and world bodies.

Saudi Arabia has supported the peace process in the Southern Philippines. Saudi Arabia, through its membership in the Organization of Islamic Conference Ministerial Committee of Six, assisted in facilitating the Government of the Republic of the Philippines – Moro National Liberation Front (GRP-MNLF) Peace Agreement.

The Philippines has been a recipient of the Saudi Government’s humanitarian aid and donations, particularly for the development of the Southern Philippines. The Saudi Fund for Development pledged a total of US$100 million in a financial assistance package intended specifically for development projects in Mindanao. In March 2004, the Kingdom sponsored the separation operation of Filipino Siamese twins, Princess Ann and Princess May Manzo. The Kingdom has also given various scholarship grants to prominent Saudi universities to qualified Filipino students. In January 2005, the Philippines received US$100,000 and 100 tons of humanitarian assistance for the flood victims in Quezon and Central Luzon.

Donations from KSA to Mindanao

July 1999 - 150 tons of foodstuff

12 June 2000 - 1^st installment of donation – 40,720 kg of relief supplies (foodstuff, medicine, tents) for evacuees displaced by Mindanao conflict

15 June 2000 - 2^nd installment of donation of relief supplies total value of cargo flight donations, P27M (1800 cartons of foodstuff each containing 3 kg. rice, 3 kg flour, 1 kg sugar, 2 kg macaroni, 1 gallon oil, 1 can food salt, 3 cans green beans, 3 packets biscuits, 1 carton Saudi-made long life liquid milk, 2.5 kg dates; 600 tents; 1200 blankets 600 rugs; 194 parcels medicines)

21 August 2000 - 3^rd installment of relief supplies (12 containers of dates weighing 216,720 kg)

5 July 2001 - US$1.04 million worth of donations given at the request of Autonomous Region for Muslim Mindanao (ARMM) Governor Nur Misuari. (donation arrived 30 June 2001 at Port of Davao City).

January 2005 - US$100,000 in financial assistance Humanitarian assistance (100 tons of blankets, foodstuffs, medicines) to flood victims in Aurora, Quezon and Central Luzon Provinces.

Saudi Arabia is the seat of Islam’s Two Holy Mosques in Makkah and Madina. Each year, Saudi Arabia hosts about two million pilgrims for the annual Hajj, aside from the millions of Muslims who visit the Kingdom to perform Umrah (small pilgrimage) throughout the year. Around 5,000 Filipinos perform the annual Hajj.

ECONOMIC AND TRADE RELATIONS

Bilateral trade between the Philippines and Saudi Arabia expanded from US$702 million in 1991 to US$1.79 billion in 2000. The balance of trade however has been in favor of Saudi Arabia, for the past five years, due to the high percentage of oil imports from Saudi Arabia. Philippine exports to Saudi Arabia only account for 3% of Philippine-Saudi bilateral trade.

From January to October 2004, Saudi Arabia was the Philippines’ 12^th largest trading partner in the world and is the Philippines’ largest trading partner in the Middle East, accounting for 29% of total trade with the region.

Saudi’s Aramco owns majority shares of Petron and the President / CEO is a Saudi national.

Note: latest available data is for January 2006.

The top 3 Philippine imports from Saudi Arabia are:

Note: latest available data is for January 2006.

The Philippines imports about 39.8% of its oil needs from Saudi Arabia and the following chemicals and petroleum derivatives:

1. Urea, in aqueous and non-aqueous solution
2. Butane, liquefied crude
3. Propane, liquefied
4. Anhydrous ammonia

LABOR RELATIONS

The Kingdom of Saudi Arabia has been one of the top destinations of Overseas Filipino Workers (OFWs). Records show that in 2001, an estimated 190,732 OFWs were deployed to the Kingdom. In 2002, more than 193,157 OFWs were deployed, 1.3% higher than that of the previous year. As of June 2004, there are estimated to be 1,020,900 Filipino workers in Saudi Arabia. There are around 850,000 Filipinos in Riyadh and Central Region and around

170,900 in Jeddah. Most of the OFWs work in the following areas:

Industrialized/specialized – 40%

Services – 24%

Household – 35%

Others – 1%

Filipino workers in Saudi Arabia are generally treated well and the Kingdom benefits much from Filipino manpower. Filipino workers tend to be preferred over other nationals because of their recognized competence and expertise in their various fields of employment.

The Saudi Government has issued several policies to promote the welfare of expatriate workers. Some of which include:

• Health insurance coverage
• Liberal travel regulations
• Payment of Iqama fees and work permits to be shouldered by the employers
• Creating of High committee for the settlement of labor disputes
• Easing of judicial process allowing the accused, including expatriate workers to hire their own lawyers.

EXISTING BILATERAL AGREEMENTS

1. Memorandum of Understanding between the Philippine Ports Authority and the Saudi Port Authority, signed 20 December 1980.
2. Air Transport Agreement, signed 23 March 1982.
3. Memorandum of Understanding for the Exchange of International Express Mail Service (EMS), entered into force 1 March 1989.
4. Agreement on Economic, Trade, Commercial, Investments and Technical Cooperation, signed 25 October 1994.
5. Memorandum of Agreement on the Establishment of Friendship Committee between the House of Representatives and the Majlis Al-Shoura, signed October 2000.
6. Memorandum of Understanding on the Establishment of Joint Business Council, signed September 2003.
7. RP-KSA Reciprocal Encouragement and Protection of Investments (Investment Promotion and Protection Agreement), signed at 2^nd RP-KSA Joint Commission Meeting (JCM), October 2005.
8. Loan Agreement (Development of Mindanao Roads Project) between the Saudi Fund for Development (SFD) and the Republic of the Philippines, signed at 2^nd RP-KSA Joint Commission Meeting (JCM), October 2005.
9. Memorandum of Understanding on Technical Education and Vocational Training, signed at 2^nd RP-KSA Joint Commission Meeting (JCM), October 2005.
10. Memorandum of Understanding on Academic and Educational Cooperation, signed at 2^nd RP-KSA Joint Commission Meeting (JCM), October 2005.

PENDING BILATERAL AGREEMENTS

• Agreement on Security Cooperation:

The draft Agreement covers cooperation in the area of international terrorism and organized crime, international smuggling, economic and money laundering, and human trafficking. The agreement also provides for the exchange of information and expertise in the above-mentioned areas and the establishment of a Joint Committee of Experts to discuss issues for cooperation and to formulate recommendations for the implementation of the agreement’s provisions in both countries.

The Philippines, as part of its efforts to participate in the global fight against terrorism, has forged security cooperation agreements with neighboring countries such as China and Australia.

• Agreement on the Avoidance of Double Taxation

The draft Agreement covers taxes on income, corporations, estates and trusts, withholding taxes on income and stock transaction tax. Income tax covers taxes imposed on total income or on elements of income, including taxes on gains from the alienation of movable and immovable property, and taxes on total amounts of wages or salaries paid by enterprises.

• Draft Memorandum of Understanding between the Commission on Higher Education (CHED) and Saudi Ministry of Higher Education.

The Agreement provides for the promotion and development of educational cooperation between the Philippines and Saudi Arabia. The Agreement further encourages exchange of representatives of universities, institutions and organizations in the field of higher education, exchange of information materials concerning higher education, research and scholarships.

Cooperation between the Philippines and Saudi Arabia in countering illegal drug trafficking and criminal syndicates can be considered crucial to the Philippine Government’s effort in protecting its nationals abroad, in light of Saudi Arabia’s strict anti-drug law. The proposed MOU aims to facilitate the exchange of information between the Philippines and Saudi Arabia, in matters concerning investigations of drug offenses, drug prevention programs and drug treatment and rehabilitation programs. The MOU also provides for cooperation between the countries in the implementation of the provisions of the 1998 UNGA Political Declaration, Guiding Principles of Drug Demand Reduction and Measures to Enhance International Cooperation to Counter the World Drug Problem.

The main purpose for concluding a Transfer of Sentenced Persons Agreement with Saudi Arabia is to allow the rehabilitation process of imprisoned Filipinos to take place in a less alienating environment that is more conducive for the prisoner’s improvement. In addition, the diplomatic strain between the countries that may arise from the incarceration of one’s national may be avoided.

Prisoner / offender transfer or "transfer" as used in House Bills 436, 929 and 1237 refer to "a transfer of an individual for the purpose of the execution in one country of a sentence imposed by the court of another country." The drafting of the bills came as a response to the prospects of forging prisoner transfer treaties with Hong Kong and Thailand. The law however, must be more outward looking and must take into account the penal systems of other countries where most Filipinos are incarcerated.

As of December 2003, there are approximately 2,240 Filipinos who are serving their sentences or who are detained with pending cases abroad. 43.17% of these cases are in Asia and the Pacific while 36.25% are in the Middle East and Africa. The Americas account for 16.43% while Europe has a meager 4.15% of the total number of Filipinos detained overseas. Saudi Arabia ranks the highest with 443 detained Filipinos while the United Arab Emirates have 106 detainees.

Then Philippine Ambassador to Saudi Arabia, Mr. Rafael E. Seguis recommended that the Department initiate talks for the establishment of Joint Bilateral Consultations between the Department of Foreign Affairs and the Saudi Ministry of Foreign Affairs. Possible agenda items for the said consultations may include a review of the regional security situation and bilateral relations through which both governments can identify the scope of cooperation in different fields such as labor and energy.

At the 2^nd RP-KSA JCM, the Department of Education, Culture and Sports expressed interest in discussing ways to improve Madrasah education with their Saudi counterparts. The proposed memorandum includes features such as an exchange student program of selected high school students, a proposal for Saudi Government’s financial support in the preparation and contextualization of the curriculum, instructional materials and publication of textbooks and handbooks for students adopting the Madrasah education and a professionalization of Madrasah teachers.

Both MOUs were drafted by the Department of Energy and presented to the Saudi Ministry of Petroleum and Mineral Resources for comments in August 2005. The MOUs is a step towards improving energy cooperation between the countries.

The MOUs were initially intended for negotiation during the proposed state visit in September 2005. Since the state visit was postponed to May 2006, the conclusion of both agreements may be timed to coincide then.

1. Visit of delegation from Saudi Ministry of Agriculture to observe Cadang-cadang research protocol in disease infected and disease-free areas, 16-20 February.

1. Visit of H.E. Minister Ali Bin Ibrahim Al-Naimi, Saudi Ministry of Petroleum and Mineral Resources to the Philippines to conduct bilateral meetings with the Philippine energy sector to discuss possible cooperation in matters relating to energy, 21-23 March.
2. Visit of Secretary Alberto G. Romulo to Riyadh after attending the 32^nd Islamic Conference of Foreign Ministers held in Sana’a, Yemen on 28-30 June, to discuss welfare of OFWs, peace and development in Mindanao, rising oil prices, June.
3. Philippine Delegation headed by Undersecretary Edsel T. Custodio visited Saudi Arabia for the 2^nd RP-KSA Joint Commission Meeting (JCM), where four agreements were signed, 1-2 October.

1. Visit of H.E. Saleh bin Abdullah bin Humaid and members of the Consultative Council to the Philippines upon the invitation of Speaker Jose de Venecia of the House of Representatives. Dr. Humaid reiterated the Saudi Government’s invitation to H.E. Gloria Macapagal-Arroyo to make a state visit to Saudi Arabia to coincide with the Philippines’ participation in the International Terrorism Conference, which was to be held in February 2005; 8-12 December.

2003

1. Visit to the Kingdom of the Presidential Adviser on Overseas Filipino Workers, Heherson Alvarez in April.
2. Visit to the Kingdom of Senator Panfilo Lacson upon the invitation of OFW community.
3. Ambassador Amable Aguiluz V, Special Envoy to GCC Countries, visited the Kingdom and met with Crown Prince Abudallah bin Abdul Aziz Al-Saud, Commander of the National Guard and Deputy Prime Minister of the Kingdom of Saudi Arabia, 19 July 2003.

1. Philippine Study Mission to the Kingdom, 10 to 18 May.
2. Visit of Labor Secretary Patricia A. Sto. Tomas and her delegation to the Kingdom, 24 to 28 May.
3. Visit to the Philippines of Director General Sultan Al-Harthi of Illegal Drugs Prevention of Saudi Arabia, 23 to 28.

1. Visit of H.E. Raul Ch. Rabe, Special Envoy of H.E. President Gloria Macapagal-Arroyo, 22 –27 February.
2. Visit to the Philippines of H.E. Dr. Ali Ibrahim Al Namla, Minister of Labor and Social Affairs of Saudi Arabia, 18 to 21 September.

1. Food Selling Mission to the Kingdom on 5 to 15 June.
2. Visit to the Philippines of Engr. Osama M. Al Kurdi, Secretary General of the Saudi Chamber of Commerce and Industry, 4 to 6 September.
3. Visit to the Philippines of H.E. Mohammad bin Ibrahim bin Jobair, Chairman of the Majlis Al Shura of Saudi Arabia, and his delegation, 9 to 14 October.

1. Visit to the Philippines of HRH Prince Salman bin Abdul Aziz, Governor of Riyadh, 30 to 01 May
2. Visit to Riyadh of H.E. Domingo L. Siazon, Jr. former Secretary of Foreign Affairs, 18 to 20 May.
3. Visit to the Philippines of the Saudi Chamber of Commerce and Industry delegation, June.
4. Negotiations and Initialing of the RP-KSA Investment Protection and Promotion Agreement, 14 to1 5 September.
5. Food Selling Mission to the Kingdom, 3 to 7 October.
6. Visit to the Kingdom of Speaker Manuel Villar and his congressional delegation, 17 to 20 October.

1. Foreign Minister Omar Al Shakaff visited Manila, August 1973.
2. Foreign Minister Carlos P. Romulo went to Riyadh to confer with King Faisal on Saudi oil supply to the Philippines, 11 September 1973.
3. First Lady Imelda Romualdez Marcos visited Riyadh to discuss bilateral relations with King Khaled and other government officials, April 1975
4. A special mission composed of Foreign Minister Carlos P. Romulo, Defense Minister Juan Ponce-Enrile, Solicitor General Estelito Mendoza and Ambassadors L.A. Pangandaman and P.A. Castro, were in Jeddah to confer with Foreign Minister Prince Saud on bilateral relations, May 1977.
5. HRH Prince Majed Ibn Abdul Aziz, Minister of Political and Rural Affairs and brother of King Khaled, was in Manila, 21 to 25 March 1978.
6. A special mission headed by Ambassador Pacifico Castro visited Jeddah to confer with Secretary General Amadou Karim Gaye of the Islamic Conference, April 1978.
7. HRH Prince Abdullah Bin Muhammed Abdul Aziz Al-Saud, son of the King of Saudi Arabia, was in Manila to observe Philippine culture, June 1980.
8. Minister of State of Saudi Arabia and President of the Saudi Port Authority Dr. Fayez Abrahim Badr was in Manila, 11 to 16 December 1980.
9. Oil Minister Sheik Ahmed Zaki Yamani was in Manila, 21 to 26 December 1980.
10. HRH Prince Saud Bin Naif Bin Abdul Aziz was in Manila, 15 to 19 January 1981.
11. Deputy Minister of Petroleum Ibrahim Al Turki was in Manila, 4 February 1981.
12. HRH Prince Faisal Bin Yazid Bin Abdullah Al Saud was in Manila, 29 May 1981.
13. Prince Khaled was in Manila, 14 September 1981.
14. President Marcos and Madame visited Saudi Arabia, 21 to 24 March 1982.
15. P.M. Cesar Virata and the First Lady Imelda Marcos, were in Riyadh to represent President Marcos on the occasion of the death of King Khaled, 15 June 1982.

Saudi Arabia continues to play an important role in the peace process in Southern Philippines. Saudi Arabia’s support for the Philippines’ bid for Observer status in the OIC is vital to the Philippines as it is an influential member of the OIC and the OIC Ministerial Committee of Eight, which monitors the implementation of the 1996 GRP-MNLF Peace Agreement. Diplomatic missions are crucial to gaining the support of the Saudi Government to Philippines positions and initiatives in the OIC, particularly to the issue of the Southern Philippines.

The Philippines imports more than 39% of its oil needs from the Kingdom. It constitutes more than 90% of the Philippine imports from the Kingdom. In addition, Saudi Arabia is considered as one of the most prospective places for exploration projects. The pursuit of energy cooperation and joint oil exploration projects would ensure the availability of petroleum resources in the country. With Philippine imports of petroleum oil valued at US$952 million, Saudi Arabia continues to be the biggest supplier of the commodity throughout the period.

In terms of the trade, the Philippines can position itself with recent developments in the GCC’s move to unify customs tariff for the Gulf region (approved in Riyadh at the 20^th Summit of the Arab Gulf Cooperation Council in November 1999). The GCC agreed to set a common tariff of 5.5 to 7.5% to be implemented in March 2005. Tariffs in the GCC region currently vary between 20% in Saudi Arabia to 4% in the United Arab Emirates.

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. Port charges and related costs have been reduced and Saudi importers can now enter into large transit trade for neighboring countries at competitive rates. Philippine manufacturers and exporters can take advantage of this development.

The garments sector will continue to have bright prospects because of Saudi Arabia’s status as a non-quota country with substantial garment imports each year. However, measures should be undertaken to price Philippine garments competitively, to prevent Saudi buyers from shifting to low-priced garments suppliers.

The Kingdom remains an attractive market for ethnic foods and other Philippine food exports due to the large number of Overseas Filipino Workers (OFWs) and other Asian expatriates in the Kingdom, as well as, the growing acceptance of ethnic foods by the Saudis. However, recent developments in the Kingdom have created trade barriers that will surely prevent the entry of certain food products to the Kingdom. Philippine authorities should address issues such as the ban on the importation of some Philippine products such as coconuts and marine products to fully maximize the potentials of the Saudi food market. During the 2^nd RP-KSA JCM in October 2005, the Philippine delegation proposed that a policy of selective accreditation be adopted for Philippine exporters of coconut and marine products since not all areas in the country are affected by disease. The Saudi side agreed to refer the proposal to the Saudi Ministry of Agriculture.

Additionally, the Philippines should vigorously aim to have Philippine standards for halal certification and accreditation be at par or acceptable to Saudi standards. This would further open the market for Philippine food products that are currently unable to penetrate the Saudi market because they are not halal-certified.

The Philippines can pursue the reconvening of the Joint Commission Meeting with the Kingdom, which is an effective venue for both governments to sit down and discuss these issues. Moreover, trade missions and product exhibit remain an effective mechanism for the promotion of Philippine products in the Kingdom.

Both the Philippines and the Kingdom of Saudi Arabia benefit from the economic contribution of an estimated 1,000,036 OFWs in the Kingdom of which 35% are domestic workers. The Kingdom benefits from the comparatively cheap Filipino labor while the Philippine economy remains stable largely due to OFW remittances.