Delegation of the European Union to the Philippines

Philippines and the EU

03/07/2020 - 17:01
EU relations with Country

The relationship between the EU and the Republic of the Philippines is a longstanding one, which has broadened and deepened remarkably in recent years. The Delegation was officially opened on 15 May 1991 following the influx of official development assistance to the country after democracy was restored under the Aquino administration in 1986.

On 1 March 2018, the Partnership and Cooperation Agreement (PCA) between the EU and the Philippines entered into force. The Agreement provides an enhanced legal framework, enabling the European Union and the Philippines to strengthen their bilateral relationship, in particular on political, social and economic matters.

Prior to the PCA, ministerial and senior official level contacts were held regularly on economic and political issues of common interest.

The first ever Joint Committee  (the highest governance body under the PCA) met in Brussels on 28 January 2020.The Joint Committee allows the Philippines and the EU to develop the full potential for cooperation in different sectors with a view to raising the bilateral relationship to a higher level and strengthening ties based on mutual interest and respect.  The next Joint Committee should meet in 2021 in Manila.

The Joint Committee established three specialized subcommittees: on Development Cooperation, on Trade, Investment and Economic Cooperation and on Good Governance, Rule of Law and Human Rights.

The EU has been a staunch supporter of the Mindanao Peace Process throughout the years and welcomed the peaceful conduct of the referendum early 2019. The EU remains committed to supporting the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) through its different instruments.

The EU Human Rights Country Strategy (2017-2020) for the Philippines focuses on the following areas of concern: 

  1. Fighting impunity and promoting rule of law,
  2. Prevention and eradication of torture and other cruel, inhuman and degrading treatment or punishment, including death penalty,
  3. Support an evidence-based approach to the fight against illegal drugs,
  4. Support human rights defenders and journalists, and
  5. Promote the rights of Indigenous Peoples, Internally Displaced People, women and children, and fight against human trafficking.

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 2019 report was adopted on 15 June 2020. This document includes a chapter devoted to the Philippines.

The chapter includes an overview of the situation as well as the multilateral context and includes the areas of political and financial engagement for the EU.

The EU continues 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, Department of Foreign Affairs and Presidential Human Rights Committee Secretariat), human rights defenders and civil society.

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.

The Philippines is a lower middle-income country that comprises over 7,000 islands and has a population of about 110 million. The Philippines does relatively well on education, life expectancy and GNI per capita. The Philippines shall continue its inclusive growth path, building on its gradual transformation to one of the region’s best performing economies sustaining an average annual growth of 6.3 percent. While the foundations for economic growth are in place, there are challenges to elevating the economic status of the poor.  Poverty declined from 26.3 percent in 2009 to 21.9 percent in 2018. It was expected to decline to 19.8 percent in 2020 before the irruption of Covid-19 pandemic. Rural poverty, however, remains high. 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 is 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.

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 increases significantly the EU grant assistance to the Philippines compared with the period 2007-2013, from EUR 130 million (PHP 7.2 billion) to the current amount of more than EUR 200 million (PHP 11 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 was focussing on 2 sectors of intervention:

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.

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.

After the mid-term review of the Multiannual Indicative Programme 2014-2020, an additional sector was added:

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.

EU and Member States, acting as Team Europe Philippines are continuously working with various stakeholders to mitigate the impacts of Covid-19 and to respond to immediate needs.

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.
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