WTO releases report on PHL trade status

The Secretariat of the World Trade Organization (WTO) has said that structural challenges continue to weigh on the country’s competitiveness, particularly high logistics expenses and regulatory bottlenecks.

This, as the WTO recognized that the Philippines made progress in lowering trade barriers and attracting investments over the past several years, but sustaining those gains will require deeper reforms to reduce logistics costs and improve the flow of goods.

In its sixth review of the Philippines’ trade policies and practices, the WTO Secretariat said the country had undertaken a series of economic reforms between 2018 and 2025.

This includes investments in infrastructure, the easing of foreign ownership restrictions in selected sectors, streamlined trade procedures, rice trade liberalization measures, and competition and procurement reforms.

“To maintain this momentum, it is essential to advance trade facilitation reforms, such as improving the onboarding of the National Single Window, establishing non-preferential rules of origin, and reviving the Unified Logistic Pass initiative,” the WTO Secretariat said in its report.

“These actions would further strengthen the trade regime, reduce trade costs, enhance competition, and enable the Philippines to fully realize the benefits of trade,” it added.

The review, conducted on June 24 and 26, was based on separate reports prepared by the WTO Secretariat and the Philippine government.

According to the WTO, international trade remains a major pillar of the Philippine economy, with trade in goods and services accounting for more than 60 percent of gross domestic product during most of the review period.

Further, during the review period, the Philippine economy grew by an average of about 5 percent annually, with GDP per capita rising to $4,279 in 2025 from $3,280 in 2018, bringing the country closer to the World Bank’s upper-middle-income threshold.

Yet, the country’s geography continues to pose challenges, with the Secretariat noting that logistics costs account for an estimated 27 percent of retail prices in the Philippines.

Citing data from the United Nations Economic and Social Commission for Asia and the Pacific and the World Bank, it added that Philippine trade costs are about 20 percent higher than the Asean average.

The WTO attributed these costs largely to infrastructure constraints and regulatory inefficiencies.

The report also pointed out that the Philippines remains vulnerable to external shocks because it relies heavily on imported food and energy, making domestic prices sensitive to developments in global commodity markets.

Despite these challenges, the WTO said authorities have pursued supply-side reforms aimed at improving market efficiency and supporting economic growth.

Among the measures cited were increased investments in connectivity infrastructure, the removal of quantitative restrictions on rice imports, reforms in government procurement and efforts to simplify certain trade procedures.

These complement the Philippine Development Plan 2023-2028, which aims to drive economic growth through trade and investment.

The WTO said further progress in trade facilitation would help strengthen competition, lower business costs, and improve the country’s ability to capitalize on trade opportunities.

The latest assessment marks the Philippines’ sixth trade policy review under the WTO framework. The previous review, which covered developments from 2012 to 2017, was conducted in Geneva in 2018.