TRADE AND INVESTMENTS between the Philippines and the European Union (EU) are still lower than the level of mutual ambitions and could be improved through a free trade agreement (FTA), the EU ambassador to the Philippines said.
“Trade and investment figures for the whole of 2024 have not yet been published, but we can already say that our bilateral exchanges are not at the level of our mutual ambitions. They are good, but they are not yet at the right level,” European Union Ambassador to the Philippines Massimo Santoro said at the 9th Joint Economic Briefing on Wednesday.
“While the EU remains, and it is good, the fourth-largest trading partner of the Philippines with a share of 11% of Philippine exports and 6% of imports, the Philippines is only the sixth economic partner of the EU amongst the ASEAN (Association of Southeast Asian Nations) countries,” he added.
Mr. Santoro said there is potential for bilateral trade and investments to grow further and that can be achieved through an FTA, citing that the target is to see a yearly increase.
“We can do more, considering the potential and the size of the Philippine market and the resources of the country. Thus, the objective of our FTA is to bring our bilateral economic ties to a new level,” he said.
“Through the FTA, we aim to facilitate not only merchandise trade but also trade in services and to create more incentives for investment. We believe that an FTA can serve as a catalyst for economic growth, benefiting businesses, workers, and consumers on both sides,” he added.
Last year, the EU and the Philippines formally resumed FTA negotiations seven years after talks were stalled due to the trade bloc’s concern over human rights violations under the previous administration.
The first round of negotiations took place in October in Brussels, Belgium, while the second round will be from Feb. 10 to Feb. 14 in Manila.
“These discussions started with a very positive momentum, and I am confident this very positive momentum will be kept in order for us, for both sides — the EU and the Philippines — to deliver well and deliver fast,” said Mr. Santoro.
He said the FTA is a priority since it will boost trade and economic bilateral ties between the EU and the Philippines.
For the second round of FTA talks, Mr. Santoro said both sides will continue working on the chapter that has been discussed in the previous round, as well as discuss other chapters. He declined to give other details.
“I am completely confident that the second round will be as productive as the first one, which means a lot,” he added.
President Ferdinand R. Marcos, Jr. is aiming to conclude the negotiations for the EU-Philippines FTA by 2027. Philippine negotiators have set an internal target of concluding the negotiations by 2026.
DTI Undersecretary Allan B. Gepty earlier said that there is a need to conclude the FTA negotiations as early as 2026, as the Philippines is set to lose its preferential market access to the trade bloc once it hits upper middle-income status.
The Philippines participates in the EU’s Generalised Scheme of Preferences Plus (GSP+), a special incentive arrangement for low- and lower-middle-income countries. It grants the country zero duties on 6,274 locally made products.
Meanwhile, the Philippines is aiming to become an upper-middle-income economy this year and a predominantly middle-class society by 2040. — Justine Irish D. Tabile
