Philippines-EU trade growth hinges on reforms, FTA–envoy

MANILA, Philippines – There remains significant headroom for trade growth between the Philippines and the European Union (EU), which could be unlocked by the planned free trade agreement. But it would also depend on continued governance reforms in Manila, a European envoy said on Thursday.

Massimo Santoro, the EU’s Ambassador to the Philippines, said bilateral trade performed “very good” last year despite geopolitical uncertainties.

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Total trade between the EU and the Philippines reached €8.3 billion from January to June 2025, up 3 percent from the same period the year before.

Still, Santoro said bilateral trade remains below its “full potential” and trails the Philippines’ regional peers.

To close this gap, he stressed the need for sustained efforts in legislative and governance reforms. These include curbing corruption following the multibillion-peso scandal that unsettled business circles in 2025.

“We very much welcome the current efforts being made by the government on good governance and fighting corruption and ensuring accountability because this is exactly what triggers and maintains investors here,” Santoro said. He said so during the launch of the European Chamber of Commerce of the Philippines’ (ECCP) “Doing Business in the Philippines” guidebook.

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He added that these reforms send a “positive signal” to European investors and could translate into higher investments and job creation.

ECCP president Paolo Duarte echoed the call, saying governance reforms are critical to unlocking the Philippines’ investment potential.

Citing data from a 2025 ECCP survey, Duarte noted that about 70 percent of European firms said they plan to expand investment and trade in the Philippines in 2026.