The Department of Trade and Industry (DTI) took measures, such as diversification of markets, free trade deals, and negotiations, to blunt the effect of US President Donald Trump’s Liberation Day tariff offensive.
An official of the French Chamber of Commerce and Industry in the Philippines said negotiations for the much-awaited EU-Philippines Free Trade Agreement (FTA) is expected to be sealed by 2026.
“Negotiations are ongoing and we are hoping that talks will be concluded by 2026 and be able to bring our countries closer,” Kevin Charuel, managing director of the French Chamber of Commerce and Industry in the Philippines, said in an ambush interview at the sidelines of the France-Philippines Business Forum in Makati City on Friday.
Trade and Industry Secretary Cristina Roque, meanwhile, joined an Association of Southeast Asian Nations (ASEAN) Economic Ministers assembly on 10 April to address the recent US trade policy, prompting them to call the United States for a dialogue.
“The United States has been more than a trading partner; it has been one of the top sources of foreign direct investments and an important partner in ASEAN’s economic architecture,” Roque said.
The Ministers unanimously agreed that a constructive dialogue with the US is essential to ensure the continued strength of the trade and investment relationship between the two entities.
As the Philippines prepares to assume the Chairmanship of ASEAN in 2026, Roque reaffirmed the country’s commitment to work with partners including the United States.
For his part, Trade Undersecretary for International Trade Group Allan Gepty said the Philippines and EU’s negotiations on the EU-FTA are on track based on the timelines that the two parties have agreed on.
“This coming June would be our third round of negotiation. Of course, we are conducting intercessional meetings so we can thresh out issues in the various chapters that we are negotiating. To date, there have been no pressing issues or major hurdles. Negotiations and engagements with our counterparts in the EU are currently smooth, productive, and constructive. We are hoping to ramp up the text-based negotiations to at least begin the market access aspect of the negotiations,” Gepty said.
Gepty said it is important to fast-track the negotiations to expand the country’s trade network, which is included in the DTI’s Philippine Development Plan, as per President Ferdinand Marcos Jr.’s directive.
The Trade official stressed that the Philippines is banking on its exit from the EU Generalized Scheme of Preferences Plus (GSP+), a pressure point for the country to finish the EU-FTA talks.
“Under the current rule of the EU-GSP+, once you breach upper middle-income status and maintain that for three consecutive years, then the Philippines can exit to EU-GSP+. So, we are trying to avoid the scenario that our preferential trade in the EU market will be disrupted. This is the reason why it is very important that before we graduate from EU-GSP+, an EU-FTA is already concluded and effective. We have to work hard to finish this,” Gepty disclosed.
He said, however, that the Philippines is just nearing becoming an upper-middle-income economy.
The World Bank last February said it expects the Philippines to attain upper-middle-income status by 2026, adding that it expects the country to grow by 6.1 percent in 2025 and 6 percent in 2026.
US, EU very important markets
Gepty said that 65 percent to 67 percent of the country’s trade goes to FTA partners, which are the ASEAN member nations, and ASEAN Plus 1, namely Australia, New Zealand, China, Japan, South Korea, India and Hong Kong.
“On the remaining portion, there are two major economies that have a relatively big share, the US and the EU market, which is almost the same in terms of total trade, from 8 percent to 10 percent. With our policy now to expand our trade network, we see a lot of opportunities that we can seize, not only in the US market but with the EU market, which is considered the most important market for the Philippines. Their market shares are bigger even though we don’t have an existing FTA with them. So, the direction for us, the government, is to enhance and improve our arrangements with them,” he explained.
On the other hand, Gepty said the Philippines is continuously advocating a separate FTA with the US.
Earlier, US President Donald Trump imposed a 17 percent reciprocal tariff on the Philippines, which was later put on hold for 90 days.
In negotiating the tariff to be lowered or even zeroed, Secretary Frederick Go, Special Assistant to the President for Investment and Economic Affairs, said an FTA with the US should be pushed.
“In my opinion, the best possible outcome is a Free Trade Agreement, which means, zero tariffs on their side, zero tariffs on our side — that’s probably the best possible outcome of that meeting but again it’s open communication, dialogue, cooperation and let’s see what we can negotiate,” Go said on Thursday after he said that he will be meeting with US Trade Representative Jamieson Greer to negotiate on the imposed 17 percent tariffs for US-bound Philippine products, in the coming days.