The European Union (EU) expressed concern over the declining investments to the Philippines and the low utilization rate by the latter of its duty-free privileges from the former.
Based on partial statistical data, foreign direct net inflows in 2019 — compared to 2018 — are showing a 32.8 percent decline to $5.8 billion.
In terms of approved foreign investments, 6 percent of total approved investment figures came from the EU, a massive decline from previous year’s average of 20 percent share contributed by the EU in approved investment figures.
“This is a worrying downward trend that could further confirm the Philippines’ modest attractiveness to foreign capital,” the EU said.
The EU cited a central bank report which showed a decline in business confidence this year due to lower consumer demand, stiffer competition and factors like rising prices and concerns over the African swine fever, environmental hazards among others.
The EU said some 2 billion euros (approximately $2.3 billion) of exports of the Philippines enter the European Union (EU) duty-free, the EU delegation to the Philippines said.
This represents about 25 percent in utilization of the Philippines’ benefits under Generalized System of Preferences Plus of the EU.
The estimate comes ahead of the release of the official utilization rate of the GSP Plus privileges of beneficiary countries like the Philippines.
It also comes ahead of publication soon by the EU Commission of he biennial GSP Report.
The report which will cover the 2018-2019 progress of the Philippines in the implementation of 27 international conventions, relating to human rights, labor rights, environmental and good governance.
The EU is hopeful the utilization rate of the GSP privileges will increase in 2020.
The EU said with the implementation of the Registered Exporter (REX) system of self certification by the EU beginning January, Filipino exporters will have faster processing time for their documentary requirements specific to GSP Plus beneficiary products.
The REX system is a system of certification of origin of goods based on a principle of self-certification.
The EU-Philippines Partnership and Cooperation Agreement (PCA) is now in the implementation phase which will signal stronger trade and investment relations between the two.
The EU said the first meeting under the EU-PH PCA will take place next week in Brussels.
Various technical working groups will be established with a view to discuss in a structured way a broad range of topics, including trade, investment and economic cooperation.
