By Justine Irish D. Tabile, Senior Journalist
The PHILIPPINES will have access to foreign countries worth approximately $12 billion once it concludes a free trade agreement (FTA) with the European Union (EU), said Trade Undersecretary Allan B. Gepty.
Citing data from the International Trade Center, Mr. Gepty said the estimate represents the potential of Philippine exports to Europe.
“Usually the reasons for this unrealized ability are two major factors: one is lack of knowledge about opportunities, and the second is dif.fithe sect to comply with certain rules and standards to access the European market,” he told reporters on Thursday.
“We hope that with this FTA we are negotiating, we can somehow fill the gaps or at least face the major problems that prevent our businesses (small, medium and small) from reaching the European market,” he added.
The Philippines and the EU are looking to conclude negotiations this year, moving from an initial target of 2027.
“We are working very hard to complete this year because after the negotiations are completed, the legislation is still being prepared and signed, and then there will be approval, it will take some time before it starts working,” he said.
He said the parties are on track to conclude negotiations within the year, adding that there are “huge possibilities.”
“The month of March is very critical, we hope to stop the text,” he said, noting that the meeting to be held in March will be for the parties. fifth a full round of negotiations.
What will be discussed in March is market access and the rest of the issues in other chapters.
He said obtaining an FTA with the EU will allow the Philippines to increase its market share where the Philippines enjoys exclusive trade access to 80%, as 70% of Philippine trade currently goes to FTA partners.
Concluding the FTA this year is also important for the Philippines as it approaches the status of the high middle income class (UMIC).
“Currently we are benefiting from the EU General System of Preferences Plus (GSP+) … And this is not a permanent system” because “We are about to reach the UMIC status, and under the EU GSP+ rules, if you hit the UMIC, and support that for three consecutive years, then you will not be eligible.fied,” he added.
He said if the Philippines achieves UMIC status this year, it will cease to be profitablefispecial program ciary in 2029.
ADB Regional Economist James P. Villafuerte told reporters on Thursday that the Philippines is on track to achieve UMIC status within the targeted timeline.
“If I look at the per capita income level in the Philippines, I think, if I’m not mistaken, it’s a few dollars away from the UMIC situation,” he said.
“UMIC status will definitely be achieved, I think, if not this year, maybe next year because we are very close to the threshold,” he added.
However, he said peers in the Philippine Association of Southeast Asian Nations (ASEAN) are now aiming to hit the jackpot.
“Indonesia wants to have a high income by 2045; Thailand also wants to have a high income. I think most of the ASEAN economies are really trying to raise the level of income,” he said.
He said the Philippines has not yet set goals for high-income status, but “for the Philippines to reach high-income status, we have to grow by about 9-10%.”
To prepare for this, he said the Philippines should focus on digital transformation, regional development, and human capital.
Meanwhile, Mr. Gepty said the Marcos administration was too aggressive in pursuing FTAs.
“In fact, what I calculate is that if we succeed in completing all negotiations and trade arrangements, we are looking at about 18 new and improved FTAs,” he added.
Besides the Philippines-EU FTA, the Philippines is in negotiations for bilateral FTAs with Chile, Canada, and India.
“We are very happy that the Philippines is very visible in international trade and the world economy, and we just have to maintain the gains we have made,” he said.
Despite these gains, he said Philippine trade continues to be deficit, although it increased in 2022.
“The challenge is how we can reverse this and how we can develop our export industries,” he said.
Looking deeper, he said 68% of Philippine imports consist of raw materials and intermediate goods, while consumer goods account for 18%.
“That means that at least our manufacturing industry is developing. Maybe not at a fast pace, but at least imports are more focused on raw materials, intermediate goods, and capital goods,” he said.
“This is an indicator of many economic activities, especially on the production side,” he added.
Meanwhile, Mr. Villafuerte said ADB expects continued growth in semiconductor exports from the Philippines this year.
“In the second half of 2025, we saw strong export performance by the Philippines, and it is related to semiconductor and electronic exports,” he said.
“We feel that this will continue this year due to the demand for digital and creative productsfiGlobal communication skills are increasing,” he added.
