The EU ranked as the Philippines' fourth largest trading partner, while the Philippines was EU's sixth largest trading partner in the Association of Southeast Asia Nations (ASEAN) in 2019. Trade in goods between the two partners equalled € 14.9 billion in 2019 while bilateral trade in services between the EU and the Philippines reached € 3.7 billion in 2018. (More statistics on the Philippines)
The Philippines continue to benefit from the GSP+ trade preference with a utilization rate of 72% in 2019. In the same year, 25% of total Philippine exports to the EU (almost 2 billion euros) enjoyed the preferential treatment under the GSP preferential trade preference.
In 2019, EU share in the total trade of the Philippines was around 10% with an almost balanced trade. Overall, the trend of increasing trade continues, a consequence of more demand, preferential treatment under GSP+ and a more positive business climate resulting in more business missions from the EU to the country. However, attracting more foreign investments in a highly competitive ASEAN region remains a challenge for the Philippines.
Top products traded between the EU and the Philippines are dominated by machinery, transport equipment; machinery; chemicals, food products and electronic components. Office and telecommunication equipment and machinery are the strongest export product of the Philippines to the EU but growth in other sectors can be noted thanks to the GSP+-preferences.
EU’s Generalised Scheme of Preferences plus (GSP+).
Since 25 December 2014, the Philippines has enjoyed enhanced trade preferences with the EU under the EU’s Generalised Scheme of Preferences plus (GSP+). Before that, the Philippines was a beneficiary of the standard GSP scheme. The special incentive arrangement for Sustainable Development and Good Governance GSP+ grants full removal of tariffs on two thirds of all product categories, aiming to support sustainable development and good governance.
GSP+ beneficiary countries are required to respect a number of international conventions in the areas of human rights, good governance, labour rights and environmental protection. In order to ensure compliance with such principle the EU commission conducts periodic monitoring in the countries and publishes country-specific reports. The latest GSP+ published report (2020).
EU-Philippines Free Trade Agreement.
Negotiations for an EU-Philippines Free Trade Agreement were launched on 22 December 2015. A first round took place in May 2016. The aim is to conclude an agreement that covers a broad range of issues, including tariffs, non-tariff barriers to trade, trade in services and investment, as well as trade aspects of public procurement, intellectual property, competition and sustainable development.
Trade-related technical assistance.
The trade strategy "Trade for All" was adopted in 2015 and aims to transform trade to make it more responsible and beneficial "for all."
One of the aims of the EU is to ensure that economic growth goes hand in hand with social justice, respect for human rights, labour rights and environmental, health and consumer protection. The EU has been leading in integrating sustainable development objectives into trade policy and making trade an effective tool to promote sustainable development worldwide. The importance of the potential contribution of trade policy to sustainable development was reaffirmed in the 2030 Agenda for Sustainable Development.
The EU’s Aid for Trade Strategy helps partner countries better integrate into the global trading system and to use trade to help eradicate poverty in the context of sustainable development.
The EU is a firm supporter of the WTO, which lays down a set of rules to help open up global trade and ensure fair treatment for all participants.
The Philippines is fully committed to multilateral trade arrangements and to the liberalisation of its trade and economy. However, there are a number of technical issues which have prevented the country from taking full advantage of global trade opportunities.
The EU started its first Trade Related Technical Assistance (TRTA) in 2005 with a grant of €3.5 million. After two more phases of TRTA, a new programme was recently concluded entitled Association of Southeast Asian Nations (ASEAN) Regional Integration Support – Philippines Trade-Related Technical Assistance (ARISE Plus – Philippines). ARISE Plus – Philippines contributes to the integration of the Philippines’ economy into the global production chain, through targeted support to both the public and private sectors. It is the national Philippines component of the ARISE Plus Programme, supporting regional economic integration and trade in the ASEAN. ARISE Plus – Philippines is a five-year programme with a budget of €6.4 million.
Technical assistance on sanitary and phytosanitary (SPS) measures is also extended to improve and strengthen the SPS framework to allow better production, processing and trade of safe food, healthy animals and plants.