Thank you for reading this post, don't forget to subscribe!
BRUSSELS, BELGIUM – Sustaining high-level exchanges between the Philippines and the European Union, Department of Trade and Industry (DTI) Secretary Fred Pascual and European Commission Vice President/Trade Commissioner Valdis Dombrovskis met on 26 June 2023 in Belgium, Brussels.
In the said meeting, Sec. Pascual highlighted the recent policy directions undertaken by the Philippines to create an enabling business environment for foreign investments. He also cited the importance of the EU Generalized Scheme of Preferences-Plus (GSP+) to stakeholders, and how the same contributed to promoting inclusiveness and socio-economic development in the country.
For his part, EVP Dombrovskis appreciates the openness of the Philippines to trade and investments especially the recent major economic reforms introduced by the country in the areas of public services and renewable energy. He also recognizes the value and importance of the EU GSP Plus in enhancing PH-EU trade relations.
To show the current administration’s resolve to work closely with the EU, Sec. Pascual gave an update on recent developments in the country such as the country’s participation in the Regional Comprehensive Economic Partnership (RCEP) agreement, the export strategy of the Philippines, the institutionalization of the Philippine Open Government Partnership, as well as developments in the areas of environment and good governance.
On EU-GSP+, Secretary Pascual remarked, “The continuation of EU GSP+ is beneficial both for the Philippines and the EU in driving inclusive growth and sustainable development.” For the year 2022, EUR 2.93 billion worth of PH products were exported to the EU using GSP+ rates, which yielded a utilization rate of 77% — the highest utilization rate PH logged.
Secretary Pascual further underscored the necessity of finalizing the GSP regulation to provide business certainty both for Filipino exporters and EU Importers. EVP Dombrovskis responded that the Philippines await the result of the EU’s ongoing trialogue deliberation on the finalization of the new GSP scheme regulation.
To provide for a more permanent mechanism in PH’s economic relationship with the EU, Secretary Pascual emphasized the need to resume the PH-EU FTA negotiations, citing the demand of the business sector such as the EU-ASEAN Business Council (ABC), European Chamber of Commerce of the Philippines (ECCP), the German-Philippine Chamber of Commerce and Industry (GPCCI) and other industry associations.
“To maintain strong economic relations with the EU, it is important that a PH-EU FTA is in place before the Philippines eventually loses its GSP+ status due to continued economic growth. With the country’s positive trajectory towards reaching upper-middle income status, it is high time for the Philippines and the EU to resume FTA negotiations,” said DTI Secretary Pascual.
Secretary Pascual added, “The PH-EU FTA would be a strategic platform for economic engagement for the EU in the Indo-Pacific and PH can well serve as its strategic trade partner.”
DTI Secretary Pascual further highlighted the Philippines’ implementation of the Regional Comprehensive Economic Partnership (RCEP), participation in the Indo-Pacific Economic Framework (IPEF), and the upcoming signing of a bilateral FTA with Korea. The Philippines is set to pursue a preferential trade agreement with India and another comprehensive FTA with the United Arab Emirates. Through ASEAN, the Philippines is negotiating an FTA with Canada.
At the end of the meeting, both sides looked forward to continuing engagements and exchanges, with the upcoming new GSP scheme and future PH-EU FTA. Since last year, the Philippines and the EU had high-level exchanges. These include DTI’s visit as well as PH-EU Interparliamentary Meeting in Brussels in October 2022, President Marcos’ visit in December 2022, and EU Parliament’s visit to Manila in February 2023.
For the last five years, the EU had been the country’s 4th to 5th largest trading partner. In 2022, the EU was our 5th largest trading partner valued at EUR 15.231 billion in total trade (7.63% share to PH total trade); 6th export market with EUR 7.96 billion, and 6th import supplier valued at EUR 7.14 billion. The EU represents around 8-11% of the Philippine export and about 24-28% of PH’s total exports to the EU are using GSP+ rates. From about EUR5.3 billion in 2014 Philippine exports to the EU is now EUR 10.4 billion as of 2022.
Similarly, the EU has been one of the largest foreign investment partners of the Philippines with total investments amounting to around EUR 836 million in 2021 and 2022. Most of these investments were recorded in manufacturing, information and communication, real estate, and administrative sectors. END.