August 01, 2023
European businessmen believe that the stream of foreign direct investments (FDI) and trade into the Philippines will increase substantially in the coming months and years following increased momentum in interest from EU countries and the brighter prospects for a free trade deal between the two partners.
Paulo Duarte, president of the European Chamber of Commerce of the Philippines (ECCP), said they have reasons to believe that the stream of FDIs will substantially increase in the coming months and years given the “wave of game-changing economic reforms in a number of key investment areas as well as notable improvements in our doing business rankings.”
Duarte spoke before the high-level ECCP and Makati Business Club event on “A New Era of EU-Philippines Relations: Driven by Stronger Trade and Investment for a Sustainable Future” on Monday, July 31 at Fairmont Makati attended by visiting European Commission President Ursula von der Leyen.
Despite the economic tailwinds and the vast potential of the Philippines, Duarte noted that only a mere four percent of the EU's foreign direct investments in the ASEAN region flow into the Philippines.
But with the game changing economic reforms, he said “In fact, we have indeed been seeing an increased momentum and interest in the Philippines now, more than ever, especially when it comes to investments in renewable energy, circular economy, digital technologies, among others.”
Already, the ECCP strongly advocates for the retention of the EU General Scheme of Preferences Plus (EU GSP+) as well as the recommencement of the Free Trade Agreement negotiations.
On the EU GSP+, the ECCP is deeply grateful for the European Commission's proposal to extend the validity of the said preferential trade scheme until 2027. As a beneficiary of this preferential trading scheme, the Philippines expects to continue enjoying zero tariffs on more than 6,000 export items.
Beyond that, the ECCP also called for the timely and successful conclusion of the EU-Philippines Free Trade Agreement as both countries agreed to resume negotiations.
“Such a deal holds immense potential to spur trade and investment opportunities, improve diversification, increase competitiveness and economic openness, generate better employment prospects, as well as accelerate breakthroughs in innovation and technology,” Duarte said.
He shared that during a Gala Dinner with President Ferdinand Marcos Jr. in May this year, the President affirmed their views that the “conditions are indeed ripe to strengthen the longstanding trade relations through the EU-Philippine FTA.”
Forging the bilateral FTA, he said, will also go beyond economic gains stressing that such “a trade deal can and will contribute to a greener, more inclusive, and sustainable Philippines.”
Trade and Industry Secretary Alfredo Pascual said the scoping discussion will start sometime next month to complete it before the end of the year. This means the formal negotiation for the FTA could follow suit hopefully by the “start of the new calendar year, 2024.”
He said it is possible that the Philippines would be enjoying three years of the EU GSP+ and the FTA, on one hand.
“As we progress in our commitment to gender equality, protecting fundamental rights, and promoting solidarity among generations, we are confident that such a partnership will support these mutual goals,” he added.
Duarte noted that the EU-Philippine bilateral ties will be celebrating its 60th anniversary next year. While he admitted of lot of work ahead to be done between the two partners, he stressed “We are increasingly hopeful and confident that together, we will achieve a greener, more inclusive, prosperous, and sustainable future for all. Trade, investment, and sustainability — all of these play a critical role in shaping the trajectory of the EU and the Philippines. It is now up to us to champion increased, sustainable trade and highlight the Philippines in the investment map. The time is NOW, and the possibilities are limitless.”
As the oldest European Chamber outside of Europe, the ECCP prided itself to have served as the voice of the European business community for 45 years now, advocating for global competitiveness, economic openness and sustainability.
The ECCP also welcomed the EU Green Deal Industrial Plan as it provides pathways for the twin green and digital transitions, fostering an environment conducive to net-zero technologies and critical raw materials.
Duarte also cited EU’s Global Gateway program which will undoubtedly boost infrastructure investments in digital innovation, green energy, transport, healthcare and education.