Philippines-EU free trade seen to unlock $12B export potential
MANILA, Philippines — The Philippines could unlock as much as $12 billion in export potential if ongoing free trade negotiations with the European Union (EU) are successfully concluded, Trade Undersecretary Allan Gepty said.
Citing data from the International Trade Center, Gepty said the country’s total export potential to Europe was valued at $22 billion, with more than half remaining untapped due to several challenges.
Philippine exporters face two main barriers in accessing the European market, according to Gepty. These are limited awareness of opportunities and difficulty complying with EU rules and standards.
“We’re hoping that through these free trade agreements (FTA) that we are negotiating, we can, in a way, fill in the gap or at least address some of the major issues that our MSMEs (micro, small and medium enterprises) and stakeholders experience when accessing the European market,” Gepty said during a joint economic briefing of foreign business chambers on Thursday.
Currently, the Philippines benefits from the EU’s Generalized Scheme of Preferences Plus (GSP+) preferential trading scheme, which has helped boost exports of key products such as tuna, coconut, coffee and pineapples.
READ: Philippines, EU take step closer to forging trade deal
Beyond goods, the program has enabled MSMEs to integrate into the European supply chain, either by exporting directly or by supplying local exporters who access EU markets.
Year-end target
Under GSP+, more than 6,000 Philippine product lines enjoy preferential access to the EU market, with the utilization rate reaching 80 percent for the first time in 2025. However, the scheme is set to expire at the end of 2027.
GSP+ is also tied to the Philippines maintaining its lower-middle-income status. Once the country reaches upper-middle-income status for three consecutive years, it risks losing these privileges.
READ: Extension of EU GSP+ scheme backed
“This gives us reason to quickly conclude the FTA with the EU because we don’t want any disruption in our trade with the EU,” Gepty said.
EU and Philippine officials are scheduled to hold the fifth full round of negotiations in March, a round Gepty described as “critical” for resolving remaining issues in key chapters, with hopes of concluding the deal within the year.
READ: PH ranks 5th biggest US GSP beneficiary
EU trade mission
In line with the negotiations, members of the European Parliament’s Committee on International Trade are scheduled to fly to the Philippines on Feb. 16 to discuss political, economic, trade and investment relations with government representatives.
This mission is meant to “demonstrate the Parliament’s commitment to supporting the conclusion of a comprehensive agreement by the end of the year,” the committee said.
Beyond the EU FTA, the Philippines is also negotiating trade agreements with Chile and Canada, with talks for the latter starting on Feb. 18.
The Department of Trade and Industry is also exploring potential FTAs with Brazil and Israel. /dda
