THE removal of the Philippines from the gray list of the Financial Action Task Force (FATF) is a good signal to the international community that the country is upholding law and order, an analyst said, as a trade official reported Sunday on a “productive meeting” with the European Union regarding a special trade incentive arrangement.
The FATF Plenary on February 21 announced the removal of the Philippines for the “positive progress in addressing the strategic anti-money laundering and countering the financing of terrorism” four years after it placed the country in the gray list in 2021.
“The removal of the Philippines from the gray list is a big picture approach on good governance,” said Michael Ricafort, chief economist at RCBC.
He said it is “a good signal to the international community in upholding law and order.”
MEETING WITH EU
The delisting was highlighted at the fifth monitoring mission of the European Union (EU) for the country under the Special Incentive Arrangement of the EU’s Generalized Scheme of Preferences Plus (GSP+), according to Allan Gepty, undersecretary of the Department of Trade and Industry (DTI).
The EU GSP+ currently provides tariff-free access to over 6,274 product lines in the European market.
“We had a productive meeting with the EU GSP+ Monitoring Mission,” Gepty said in a text message on Sunday regarding the mission held in Manila on March 11 and 12. “We were able to give updates on recent progress and developments in the areas of human rights, labor, good governance, and environment in line with our international commitments and obligations,”
Gepty said while the discussions focused on the 27 core conventions on human rights, labor, environment, and good governance, ‘FATF is one positive development that strengthens good governance and reinforces the Philippines as an ideal investment destination.”
Ricafort said the EU is very sensitive to international law, human rights, good diplomatic relations, sustainability and policies friendly to the environment and society in terms of doing business and in granting trade incentives or privileges especially for the country’s exports.
There are 27 international conventions each GSP+ beneficiary has to comply with, the EU delegation in the Philippines said in its website.
One of these is the UN Convention against Corruption which addresses the prevention, investigation, and criminal prosecution of corruption as well as the confiscation of revenues. Different forms of corruption are included in the Convention, for instance bribery, abuse of functions, trading in influence, as well as a number of acts in the private sector.
In addition, the Convention includes a provision on asset recovery which means that assets are being returned to their owners. The Convention against Corruption is one of the four good governance conventions covered by the GSP+ regulation, the EU said.
MORE OPPORTUNITIES
Ricafort said the country’s exit from the FATF gray list signals improved governance standards that would open more doors/opportunities with like-minded developed countries when it comes to increased trade, investments, and other business opportunities
Gepty said the Philippines reported the following to the EU mission: the adoption of the Human Rights Action Plan; the establishment of a Special Committee on Human Rights Coordination; the creation of a technical working group for the establishment of a National Forensic Institute; the creation of an inter-agency committee to strengthen the coordination and facilitate the investigation; prosecution and resolution of cases of alleged violations of freedom of association and the right to organize; and other programs and initiatives of the Philippine government related to good governance, climate change, and environment.
The DTI in a social media post on March 13 said Gepty underscored the government’s resolve in implementing the commitments covered under the 27 international conventions of the GSP+ scheme .
The EU delegation in the Philippines in its website said the Philippines is one of only eight countries worldwide benefiting from the GSP+, which requires the effective implementation of 27 international conventions.
According to the EU, the information gathered by its monitoring mission will feed into the next report to the European Parliament and the Council on the implementation of the GSP, which will include the assessment of progress regarding compliance with the 27 international conventions by each GSP+ beneficiary.
FTA TALKS
Gepty said during the meeting with the mission, the prospects of the free trade agreement (FTA) between EU and the Philippines was also discussed, especially on the inclusion of elements relating to sustainable development.
“With our continuous engagement with the EU, we hope to further advance the Philippines-EU economic relations and in the process create more opportunities for our people,” he added.
In a February 18 report, Malaya Business Insight quoted Gepty as saying both parties are working to fast track the negotiations on the FTA and conclude the same before 2027.
Gepty was also quoted as saying eight new and important elements of the proposed FTA of the Philippines with the EU that have emerged at the second round of negotiations in Manila on February 10 to 14. Talks will continue when the parties meet for the third round in Brussels, Belgium in June.
These elements include digital trade; energy and raw materials; good regulatory practices; government procurement; state-owned enterprises; sustainable food systems; micro, small and medium enterprises; and trade and sustainable development.
Gepty said the GSP+ continues “to serve as a cornerstone for enhancing trade relations and expanding Filipino enterprises’ participation in global markets.”
The DTI said the EU GSP+ Mission was led by Dr. Jörg Wojahn, head of Unit for Trade and Sustainable Development of the EU Directorate General for Trade.
The mission, the DTI said, was preceded by the Philippines’ submission in December 2024 of the GSP+ Monitoring Scorecard. This is part of the reportorial requirements of beneficiary member countries under the scheme.
The delegation of the EU in the Philippines in its website said the meeting with the DTI was part of the monitoring mission that started March 6 which also involved exchanges with civil society representatives, trade unions, business leaders and international organizations active in the Philippines.
The stocktaking meeting on March 11 and 12 included talks with representatives of the government, led by the DTI and including senior officials from the Departments of Foreign Affairs, Justice, Labor and Employment, Environment and Natural Resources, as well as from the Presidential Human Rights Committee Secretariat, the Supreme Court, and other relevant government entities, the EU said.
Philippine exports to the EU have grown significantly, from 5.3 billion euros in 2014 to 8.6 billion euros in 2023, according to Gepty, citing official data.
He said this has benefitted Filipino enterprises and created livelihoods across regions.
