The Philippines is looking forward to forging free trade agreements (FTAs) with two key partners as part of its sustainable growth strategy.
At the Pilipinas Conference yesterday, Secretary Ramon Lopez of the Department of Trade and Industry said the government is pushing for the resumption of its negotiations for an FTA with the European Union (EU), saying the deal is important in achieving its economic priorities.
In a separate event titled Global Biz Forum also yesterday, Korean ambassador to the Philippines Kim In-chul said the planned Philippines-Korea FTA whose negotiations concluded recently should boost Seoul’s investments to Manila. Korea’s investments accounted for just 2.5 percent of what it had poured into Asean in 2020.
Lopez told delegates of the Pilipinas Conference the Philippines: “Looking at the current economic priorities of the Philippines and our efforts towards establishing the country as a hub for manufacturing, innovation, research and development, and a center for training and education in the region, there is a compelling reason for the EU to strengthen ties with the Philippines through an FTA.”
Two rounds of negotiations were held but these have been stalled.
Lars Wittig, president of the European Chamber of Commerce of the Philippines, in the same forum said until after the elections, it would be challenging to push the negotiations.
Wittig was referring to the possibility the new government may not be in favor of pursuing an FTA with EU given the human rights issues raised against the Philippines.
Wittig said a second choice would be to pursue an Asean-EU FTA instead.
But Lopez said notwithstanding discussions for a possible FTA, a core feature of the Philippine relations with the EU is the EU Generalized Scheme of Preferences (GSP+).
For 2020, total exports to the EU amounted to 6.2 billion euros of which 2.1 billion euros were covered by GSP+, and of which 1.6 billion euros availed of GSP+ preferences. GSP+ utilization grew from 72 percent in 2019 to an all-time high of 75 percent in 2020.
“To stabilize this engagement, it may be well to consider now a more secure and predictable business environment through an FTA with the EU,” he added.
Kim at the Global Biz Forum said the planned Philippines-Korea FTA is not just going to strengthen trade and investments between the two countries .
He said the FTA’s entry into force is an “indispensable basis for cooperation for the two countries towards inclusive society… unlike other FTAs.”
Kim said cooperation will delve on the spread of infectious disease through joint efforts in
vaccine manufacturing and research and development as well as initiatives addressing climate change.
He added a restructuring of the global supply chain is underway with the new coronavirus disease 2019 and Asean has emerged as a competitive investment destination. Korean companies’ direct investment in Asean continue to expand, Kim said.
In 2020, Kim said 20.33 percent of Korea’s total foreign direct investment equivalent to $9.2 billion was invested in Asean.
“However, despite the growing investment of Korean companies in Asean region, investment from Korean companies, to the Philippines remains only 2.5 percent of the total investment in the Asean region,” Kim added.
He cited the potentials of the Philippines like having the world’s 13th largest population, young and excellent human resources, beautiful tourism resources and a digital sector that has proven resilient amid the pandemic.
“I believe there is a lot more room for investment,” Kim added. – Irma Isip
