WTO sees progress in PH trade reforms

MANILA, Philippines – Despite its inherent disadvantages, the Philippines has taken “solid steps” toward reducing trade costs over the past eight years, the World Trade Organization (WTO) said, although it stressed that further reforms would be needed to sustain such gains. 

In a report ahead of the sixth review of the Philippines’ trade policies, the Geneva-based WTO cited a series of supply-side reforms implemented between 2018 and 2025 that sought to reduce trade costs, attract investments and support economic growth.

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“During the review period, the Philippines has taken solid steps to reduce trade costs, attract investment, and promote the development of MSMEs,” the WTO Secretariat said in its report, which will guide the policy review. 

According to the WTO, the Philippines continues to face relatively high trade costs because of its archipelagic geography.

Geography-driven costs

Logistics expenses account for about 27 percent of retail prices, while the country’s overall trade costs remain about 20 percent higher than the Asean average, largely because of infrastructure gaps and regulatory inefficiencies.

Still, the WTO said the reforms helped support stronger economic performance during the review period.

Among the measures it cited were revamped government procurement rules, the adoption of a national competition policy, the relaxation of foreign equity restrictions and the streamlining of trade procedures.

The WTO also pointed to amendments to the Public Service Act, Foreign Investments Act and Retail Trade Liberalization Act, the establishment of Green Lanes for Strategic Investments, and the CREATE and CREATE MORE laws.

In its statement during the review, the European Union — one of the Philippines’ largest trading partners and with which Manila is negotiating a free trade agreement (FTA) — also welcomed the country’s recent economic reforms.

EU flags ‘longstanding challenges’

At the same time, it sought updates on how the Philippines plans to address “longstanding challenges affecting the investment climate,” such as regulatory and administrative complexity, infrastructure and logistics constraints, and restrictions on foreign participation in certain sectors.

The bloc also called for further improvements in government procurement transparency, border procedures, agricultural trade policies and measures supporting strategic industries.

The WTO likewise urged the Philippines to press ahead with trade reforms.

“To maintain this momentum, it is essential to advance trade facilitation reforms,” it said.

Among its recommendations were completing the onboarding of the National Single Window, establishing non-preferential rules of origin and reviving the proposed Unified Logistics Pass.

According to the WTO, these measures would “further strengthen the trade regime, reduce trade costs, enhance competition, and enable the Philippines to fully realize the benefits of trade.”

Trade Undersecretary Allan Gepty represented the Philippines during the WTO review held on June 24 and 26. /pai INQ