The European Union (EU) and the Philippines are in consensus in stating that the EU-Philippines Free Trade Agreement (FTA) should be sealed at the soonest possible time, as the EU’s Generalized Scheme of Preferences Plus (GSP+) is set to expire in 2027.

This was discussed following the meeting between Philippine Economic Zone Authority (PEZA) director-general Tereso Panga and the 16-member delegation of the European Parliament Committee on International Trade (EU-INTA) at the PEZA Head Office on 17 February 2026 as part of its trade mission to the Philippines, in commitment to advancing the PH-EU FTA.

At said meeting, the officials underscored the importance of the EU’s GSP+ as a cornerstone of current economic engagement, noting that ongoing discussions with the Philippines are aimed at gauging the “temperature” of its business environment — assessing policy stability, regulatory transparency, and competitive fairness, as these factors are crucial to ensuring a smooth transition toward a comprehensive trade partnership between EU and the Philippines.

Only ASEAN member with active EU GSP Plus+ status

Notably, the Philippines is the only ASEAN member state with active EU GSP+ status since 2014, allowing duty-free entry for over 6,000 products.

The EU–Philippines trade relationship is currently anchored on the GSP+, which supported €2.2 billion in Philippine exports in 2024 and enabled stronger MSME participation in European value chains. Total bilateral trade reached €16.8 billion, underscoring the EU’s importance as a trade and investment partner.

However, with GSP+ set to expire in 2027, both sides recognize the urgency of concluding the PH–EU FTA to avoid trade disruptions and secure long-term market access.

DTI Secretary and PEZA Board Chair Cristina Roque, who is leading the negotiation with EU, estimated that a successful FTA could unlock up to $12 billion in additional export potential, particularly by addressing compliance challenges and improving awareness of EU market opportunities.

The EU delegation was headed by H.E Massimo Santoro, the Ambassador of the European Union to the Philippines, and Hon. Bernd Lange, the Chair of the INTA Committee and Head of the Delegation from the Group of the Progressive Alliance of Socialists and Democrats (Germany).

Other European Parliament members included rapporteurs representing EU countries such as Sweden, Romania, Latvia, Spain, Lithuania, and Belgium.

More EU investors coming

Meanwhile, PEZA DG Panga expressed confidence that more investors from the EUare expected to expand and establish operations in the Philippines once the PH–EU FTA is finalized.

During the visit, DG Panga provided a briefing to the EU officials on the Philippines’ investment environment, reform development, strategic advantages of locating within PEZA ecozones, and PEZA’s role in supporting export-led and industrial growth. He underscored the Philippines’ positioning as a competitive EU partner in Southeast Asia, citing strong services-sector growth, a deepening electronics and manufacturing base, and ongoing infrastructure modernization as key drivers of medium-term expansion.

Priority sectors 

Panga further outlined priority sectors where European capabilities align closely with Philippine and ASEAN growth trends for 2026–2030, including electronics manufacturing and supply chain services, logistics and infrastructure digitalization, and renewable energy development focused on grid resilience and energy storage.

“What is more encouraging is that even up to 2027, the S&P Global still projected the Philippines as the second -fastest growing economy in Asia pacific… backed by a think tank report that says we can benefit more with EU cooperation with their best fits to the Philippines particularly in Electronics manufacturing, EMS, and supply chain services, infrastructure, ports, logistics digitalization, and renewable energy development. This is a meaningful signal for 2026–2030 planning, as we in PEZA are diversifying our supply chain to strengthen our resilience and stability, especially in an increasingly uncertain global environment.” DG Panga noted.

In the open forum session, members of the delegation raised questions on the specific conditions governing importation within PEZA ecozones, the differentiation of incentives between investments located inside and outside the Philippines and the European Union, and the eligibility criteria for MSMEs.

Other members focused more on the PEZA programs for attracting EU trade and investments, ease of doing business measures, as well as digitalization and sustainability initiatives.

The Romanian representative asked PEZA to share their country’s Philippine ecozone development strategy and digitalization initiatives, while the Belgian representative inquired about PEZA’s reverse trade program as a tool for integrating MSMEs into the ecozone value chain.