The Philippines achieved a historic milestone in its foreign economic policy following the signing of the Comprehensive Economic Partnership Agreement (CEPA) on 13 January, marking the nation’s first free trade deal in the Middle East.

According to the Department of Trade and Industry, the strategic alliance secures seamless trade flows and mandates a high-growth environment through expanded market integration and strengthened cross-border cooperation.

The agreement was signed by Trade and Industry Secretary Cristina Roque and United Arab Emirates (UAE) Minister of Foreign Trade Thani bin Ahmed Al Zeyoudi, in the presence of President Ferdinand R. Marcos Jr. and UAE President Mohamed bin Zayed Al Nahyan.

Secretary Roque said the CEPA reflects the administration’s strategy to use trade policy as a tool for long-term economic positioning.

Strategic trade deals

“Following President Ferdinand R. Marcos Jr.’s directive, we are using strategic trade deals to move Philippine businesses into higher-value markets and more integrated supply chains. In doing so, the CEPA gives our exporters and service providers a stable platform in the Middle East and sends a strong signal that the Philippines is open for deeper, rules-based economic partnerships,” Roque emphasized.

Under the agreement, about 95 percent of Philippine exports to the UAE will enjoy preferential tariff treatment, helping manufacturers expand exports, scale up production, and generate more jobs at home.

Products that will benefit include personal care and cosmetic items (hair creams and deodorants), food products (canned tuna, sardines, snacks, and condiments), electronic equipment (hair dryers, instant-print cameras, and parts of electrical machinery), automotive and aircraft parts, and textile and apparel products.

Moreover, the CEPA provides clearer and more predictable rules for businesses operating in key service sectors, including professional services, construction, retail, IT-BPM and tourism.

This improved business environment supports the expansion of Filipino service providers in the UAE and encourages UAE firms to invest in the Philippines.

Opening cooperation in priority areas

The agreement also goes beyond traditional trade by opening cooperation in priority areas such as digital trade, MSME, trade, and sustainable development — covering the promotion and protection of labor and the environment, intellectual property rights protection and enforcement, competition and consumer protection, government procurement, and economic and technical cooperation.

In 2024, the UAE ranked among the Philippines’ top trading partners and served as a major export market in the Middle East, highlighting the significance of the CEPA’s wide-ranging cooperation framework as both countries move toward deeper trade, services, and investment integration.

The Philippine government estimates that exports to the UAE would grow by 9.13 percent, or around $2 billion, based on 2024 levels.

A landmark step

Meanwhile, the Philippine Chamber of Commerce and Industry (PCCI) welcomed the signing of the Philippines — UAE CEPA, calling it a landmark step in expanding Philippine trade, investment, and global market access.

The PCCI said the agreement strengthens ties with one of the Middle East’s most important commercial hubs, giving Filipino exporters, investors, and SMEs greater access to a high-income, highly connected market.

“The UAE serves not only as a major destination for Philippine exports but also as a global gateway linking Asia, the Middle East, Africa and Europe. With CEPA, exporters, investors, and SMEs now have a stronger platform to grow not only in the UAE but across the wider Middle East and beyond,” PCCI president Perry Ferrer said.

Further, the Chamber highlighted how CEPA will help diversify the Philippines’ trade partnerships, reducing reliance on a limited number of traditional export markets.

“By opening new channels through the UAE’s logistics and re-export networks, CEPA makes Philippine trade more resilient and better positioned for long-term growth,” Ferrer added.

New opportunities

Moreover, the PCCI welcomed the new opportunities CEPA opens in food and agriculture, manufacturing, construction materials, and digital and professional services, and in enabling Filipino service providers — from ICT and BPO to healthcare and tourism — to compete under more predictable and non-discriminatory conditions.

The Chamber further commended the provisions for micro, small, and medium enterprises.

“Finally, we have an agreement that will now allow our small businesses to export products, offer services, and partner with UAE companies more easily,” Ferrer said.