Philippines and the EU

Political and economic relations

Discussions on economic and political issues of common interest, at both ministerial and official level, have been held regularly since then. In addition, bilateral dialogues with the Philippines have included periodic reviews of political, economic and cooperation issues in regular Senior Officials Meetings.

On 1 March 2018, the Partnership and Cooperation Agreement (PCA) between the EU and the Philippines entered into force. The Agreement provides a new and enhanced legal framework, enabling the European Union and the Philippines to strengthen their bilateral relationship, in particular on political, social and economic matters, including human rights. It reflects the longstanding partnership the European Union has with the people of the Philippines and the European Union's commitment to investing in a strong and beneficial relationship that benefits both EU and Filipino citizens.

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.

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.

Human Rights

The EU Human Rights Country Strategy for the Philippines focuses on the following areas of concern:

Support to Human Rights Defenders (HRDs). This support is taken forward through continued assistance to Civil Society Organizations/HRDs, through grants under the European Instrument for Democracy and Human Rights (EIDHR), through individual programmes of EU countries, and through improved human rights dialogue with HRDs;
Support to justice sector reform and support for efforts to combat impunity in the areas of extra-judicial killings and enforced disappearances. The support includes an EU justice sector reform project, funded under the Development Cooperation Instrument (DCI), support to the National Monitoring Mechanism for Extra Judicial Killings (EJKs), EU countries support projects and HR dialogue with civil society, as well as the monitoring and follow-up of EJKs cases;
Support to improve Economic, Social and Cultural rights. The support mainly includes continued EU development assistance focusing on poverty alleviation and human and social development;
Support for Children Affected by Armed Conflict (CAAC). This is done through the EU's support of the peace process in Mindanao, including the support of the International Monitoring Team (IMT), support for NGOs calling for protective legislation, and through supporting respect for international laws and standards.

EU-Philippines Human Rights Dialogue

The EU-Philippines Partnership and Cooperation Agreement signed in 2012 calls for the establishment of a meaningful Human Rights dialogue in the form of a Working Group on Human Rights. Ahead of the ratification of this Agreement, Human Rights are discussed under the legal framework of the periodic meetings of Senior Officials (SOM). The 9th SOM took place on 4 July 2017.

EU Annual Report on Human Rights and Democracy in the World

Every year, the Council of the EU adopts the EU Annual Report on Human Rights and Democracy in the World. The 2018 report was adopted on 13 May 2019 .

This document includes a chapter devoted to the Philippines. In 2014, the EU continued to engage with its partners, including the national and regional Commissions on Human Rights (CHR), state actors (Department of Justice, Department of Interior and local governments), human rights defenders and civil society.

In its regular political dialogue with the Philippine authorities, the EU repeatedly recalled the need to address more systematically the issue of impunity, and bring the perpetrators of gross human rights violations to justice. Under the European Instrument for Democracy and Human Rights (EIDHR), in November 2014 the EU made available € 1.8 million to pay for projects, which will focus on the protection of human rights defenders and groups threatened by extra-judicial killings, torture or others of the worst forms of human right violations, the protection of the rights of children affected by armed conflict, and the promotion of the people’s rights in the Bangsamoro territory.

The EU continued providing financial support through the Development Cooperation Instrument (DCI) and the Instrument for Stability (IfS) in the "Justice for All” programme, aimed at enhancing access to justice and fighting impunity; building up the Regional Human Rights Commission in the Autonomous Region in Mindanao; protection of economic, social and cultural rights of the population, focusing on poverty alleviation, human and social development, and good governance.

Trade

With bilateral trade in goods amounting to €14.2 billion in 2017, 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). Philippines' exports to the EU grew by 12.7% according to Comext– an effect mostly due to an uptake in GSP+-related exports; in 2016, the GSP+ utilisation rate of the Philippines was 71%.

In 2015, EU share in the total trade of the Philippines was 11% but the relationship changed from the EU being a stronger import partner to a stronger export partner of the Philippines. In the recent years, the Philippines moved from trade deficit to a surplus of €960 million in 2017. Overall, the trend of increasing trade and investment continued in 2017, 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.

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.

Philippines total trade in services with the world according to the World Bank in 2014 is 16% of GDP at market prices (around US$ 46 billion (€38 billion). Bilateral trade in services between EU and the Philippines in 2014 was €3.3 billion, 5% growth from 2013. Import (from Philippines) and export (to the Philippines) of services grew by 6% and 3% respectively. The Philippines also had a steady export of services in the tourism and transport sector.

The Philippines and ASEAN

The Philippines is one of the 10 members of the Association of Southeast Asian Nations (ASEAN), the fifth largest economy in the region and, with a population of over 100 million, the second biggest market in ASEAN.

Taken as a whole, ASEAN would rank as the eighth economy in the world and the EU's third largest trading partner outside Europe, after the United States and China. In 2013, bilateral trade in goods and services between the EU and ASEAN reached more than €235 billion.

When completed, the ASEAN Economic Community will constitute the third largest market in the world, with more than 600 million potential consumers. Ensuring better access for EU exporters to the dynamic ASEAN market is a priority for the EU.

Since identifying ASEAN as a priority region in 2006, the EU has been actively engaged with the region. Negotiations for a region-to-region FTA with ASEAN were launched in 2007 and paused in 2009 to give way to bilateral negotiations, which should be building blocks towards a future region-to-region agreement.

Bilateral negotiations were launched with Singapore and Malaysia in 2010, with Vietnam in 2012, with Thailand in 2013 and now also with the Philippines. The talks with Singapore and Vietnam were successfully concluded in 2014 and 2015 respectively.

Trade-related technical assistance

The EU has recast its development efforts on trade to help developing countries reduce poverty and provide sustainable opportunities for growth.

Since the establishment of the Doha Development Agenda (DDA) as the trade-negotiation round of the World Trade Organisation (WTO), the EU has strongly advocated open rules-based trade negotiations to ensure fair, free, and safe trade. On October 2007, the EU adopted the EU Aid for Trade Strategy to help developing countries to better integrate into the world trading system and to use trade to help eradicate poverty in the context of sustainable development.

The EU also provides considerable development assistance to third world countries to help them meet their responsibilities in the evolving global trading system, in which new rules and regulations aim at ensuring public health and public safety.

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 (http://www.ec.europa.eu/trade/).

The Philippines is fully committed to multilateral trade arrangements and to the liberalisation of its trade and economy. But a number of technical issues have impeded its active participation in global trade and reduced its ability to benefit from such global arrangements.

Towards the end of the 2004, the EU and Philippines agreed to cooperate to deal with these problems. In 2005, the first Trade Related Technical Assistance (TRTA) was formalized between the EU and the Philippines. The EU provided PhP 210 million (3.5m euro) for this technical assistance. TRTA 1 concluded in the third quarter of 2008 and was succeeded with two phases of TRTA.

Development Cooperation

The Philippines is a lower middle-income country that comprises over 7 000 islands and has a population of 106 million. The Philippines does relatively well on education, life expectancy and GNI per capita. However, economic progress over the past decades has had only a limited impact on poverty reduction mainly owing to high population growth, unemployment, corruption, patrimonial politics and local conflicts. Despite gender equality regulations, the Philippines still face high gender inequality in the labour force participation and limitations in the reproductive health sector.

The main challenge for the Philippines to accomplish its Philippine Development Plan 2017-2022 (PDP), a medium term strategy for poverty reduction and achievement of the SDGs, is to make growth more inclusive and to accelerate job creation by increasing investments particularly in infrastructure, better governance and by improving the business environment including better business services.

The EU's support to the Philippines currently focuses on governance, job creation, renewable energy, and assistance to vulnerable populations, specifically in Mindanao which is the poorest region of the Philippines and has been affected by conflicts and population displacement. The EU remains one the biggest foreign development partners in support to Mindanao and the Peace Processes through a comprehensive approach targeting directly the political settlement with the Instrument contributing to Stability and Peace and longer term development mainly through the Development Cooperation Instrument.

The EU-Philippines relationship has deepened further after the EU-Philippines Partnership and Cooperation Agreement entered into force on 1 March 2018. EU development assistance is closely aligned with the PDP. The Plan provides a framework that allows the EU to align its development cooperation programmes with Government policies and programmes with clear leadership and ownership on the part of the Philippine authorities.

The EU support strategy for the period 2014-2020 doubles EU grant assistance to the Philippines compared with the period 2007-2013, from EUR 130 million (PHP 7 billion) to the current amount of EUR 260 million (PHP 17 billion). Most of the EU funds are given as grants making the EU jointly with EU Member States the largest grant donor in the Philippines. The Multiannual Indicative Programme 2014-2020 focuses on:

Rule of law: the EU supports the rule of law and the needed governance reforms in justice sector institutions as mentioned in the PDP 2017-2022 which envisions the following outcomes: (i) Criminal, commercial and administrative justice systems enhanced; (ii) improved sector efficiency and accountability. Specific assistance will also be provided to the new political entity of the "Bangsamoro" to ensure that the new institutions link appropriately to the national system and respect internationally recognized laws and norms. Ensuring that the rule of law situation improves significantly after the signing of the Peace Agreement not only at the regional but also and perhaps more importantly at the local level will be key to preserving peace and stability and promoting economic and social development.

Inclusive growth through access to sustainable energy and job creation: the EU works with the Philippines to make growth more inclusive and more sustainable by connecting more poor people to the electricity grid and by promoting decent work including the strengthening of women's employment opportunities. Job growth is targeted at the poorest areas of the Philippines including conflict-affected areas, Mindanao and the Visayas which were devastated by typhoons. It is proposed that the EU intervention focuses on increasing energy efficiency gains and promoting renewable energy both on- and off-grid. The EU intervention is aligned with the Philippines Government objectives of bringing energy to the poor and reducing the reliance of the economy on imported (carbon-intensive) fuels, of making growth more inclusive by promoting sustainable development in remote areas and of using sustainable energy as part of the National Climate Change Action Plan. EU interventions will ultimately contribute moving the Philippines towards the path of a Green Economy. Promotion of renewable energy in the Philippines is also crucial to jointly address the global challenge of climate change.

In addition to the initial Multiannual Indicative Programme 2014-2020:

Peacebuilding in Mindanao: in view of the renewed interest of the Philippine Government for the peace processes in Mindanao, the EU decided to develop a more sustained approach in supporting the Mindanao peace road map and governance framework and in contributing to the delivery of peace dividends at a grass root level. The EU will focus on contributing to achieving lasting peace and community resilience through early recovery, relief and rehabilitation, the implementation of peace settlements, civilian protection, ceasefire and monitoring mechanisms, promotion of inclusive participation of stakeholders, including women, in peace-building and providing platforms for dialogue and mediation including expansion of networks that will promote the culture of peace, prevent radicalisation and counter violent extremism in the whole Mindanao.

Bilateral EU-Philippines development cooperation is complemented by projects financed through regional and thematic programmes and instruments that are often implemented by civil society organisations addressing social issues, environment, indigenous people rights, human rights, local governance, peace building, and migration.

In addition, the EU is one of the most important donors to support the Philippines in cases of serious natural disasters which require emergency aid, such as after super-typhoon Haiyan.

The impact of EU’s development cooperation in the Philippines:

EU’s support to the Health Sector through budget support programmes (closed in 2018) significantly contributed to the country's goal of achieving Universal Health Care and to strengthening confidential, voluntary and evidence-based treatment of drug dependent persons.
The EU contributes to the national electrification policy through the electrification of 100,000 households with innovative renewable energy solutions coupled with livelihood activities.
In the justice sector, EU’s support contributes to the curtail of backlog in courts, the reduction of prosecution services and the improvement of case management with focus on “justice zones”
EU's comprehensive support to the Bangsamoro peace process facilitated the passing of the Bangsamoro Organic Law and its ratification by the population.

Documents

2014-2020 Multi-annual Indicative Programme for The Philippines

Sign-up