The Philippines’ global economic integration

The Philippines’ global economic integration is further strengthened through its FTAs with third countries. The Philippines has an FTA with Japan, the Japan-Philippines Economic Partnership Agreement (JPEPA) and also concluded an FTA with the EFTA group of countries earlier this year.

The Philippines is also party to the ASEAN Free Trade Agreement (AFTA), the ASEAN-Australia-New Zealand Free Trade Agreement  (AANZFTA), the ASEAN-China Free Trade Agreement (ACFTA), the ASEAN-India Free Trade Agreement (AIFTA), the ASEAN-Japan Comprehensive Economic Partnership Agreement (AJCEPA) and the ASEAN-Korea Free Trade Agreement (AKFTA).

The Philippines is not one of the 12 countries to initially form part of the Trans-Pacific Partnership (TPP) although it is considering accession at a later stage. It is also part of the negotiations for a Regional Comprehensive Economic Partnership (RCEP) and the ASEAN-Hong Kong FTA (AHKFTA).

Most importantly for European business, it is currently in the process of negotiations for an EU-Philippines FTA, after scoping was concluded at the end of 2015, and the first round of negotiations took place in May 2016.

EU-Philippine  Economic  Ties

The first round of negotiations for the EU-Philippines FTA took place in Brussels on May 23-27. Negotiation teams met on the following areas: trade in goods, rules of origin, sanitary and phytosanitary measures, services and investment, intellectual property rights (including geographical indications), competition, trade and sustainable development and dispute settlement.

However, negotiating groups for technical barriers to trade, customs and trade facilitation and Government procurement did not convene during the first round.

Subject to delays in the negotiation process, the conclusion of the EU-Philippines FTA will mark the Philippines as the third ASEAN country to complete an FTA with the EU, after Singapore and Vietnam.

In terms of market access to the EU market, the Philippines has already benefited substantially from tariff free access to EU Member States for 6,274 product lines, following the application of GSP+ on  January 1 2015. In the first months after the application of GSP+, Philippine exports to the EU increased by 27 percent. Major Philippine export products to the EU benefiting from GSP+ include crude coconut oil, canned tuna, pneumatic tires, spectacle lenses, relays, preserved fruits, board and similar cabinets for electric control or the distribution of electricity, and ballasts for discharge lamps.

In fact, 2015 was the first year that the Philippines showed a trade surplus in bilateral trade with the EU, equivalent to EUR653 million. Philippine exports of goods in 2015 reached EUR6.8 billion in absolute terms, compared to EUR5.7 billion in 2014. Main goods exported to the EU include office telecoms equipment, machinery and food. Food and manufactured products saw the biggest growth. The Philippines’ main trade partners in the EU are Germany, France, the Netherlands, the United Kingdom and Italy.

Philippine imports of goods from the EU to the Philippines were estimated at EUR6.2 billion in absolute terms in 2015, compared to EUR6.8 billion in 2014. The main products imported from the EU included transport equipment, machinery, food products, chemicals, and electronic components. Bilateral trade reached EUR12.98 billion in 2015.