The Market Monitor Minding the Nation's Business
By Riza Lozada
The European Union (EU), the country’s largest source of foreign direct investment (FDI), has given an assurance of its commitment to strong trade ties with the Philippines, despite the recent outburst of President Duterte against the EU Parliament because of its resolution demanding that the Philippines respect international rights conventions in the conduct of its war against illegal drugs.
The EU delegation in the country said trade relations would remain strong, particularly with the expected signing of the Free-Trade Agreement (FTA) between the Philippines and the EU and the continuation of the Generalized System of Preferences Plus (GSP+) that grants tariff-free access to EU member of 6,274 local products.
EU Ambassador to the Philippines Franz Jessen also said a 300-strong trade mission composed of top-level executives and EU officials whom he described as “the most influential decision-makers” in the bloc would be attending the EU-Philippines Business Summit 2016 on Oct. 4. The meeting aims to deepen the ties between the two trading partners and help define the next chapter of economic and trade relations between the economic community and the Philippines.
European Chamber of Commerce of the Philippines President (ECCP) Guenter Taus added that the EU has funded the EU-Philippine Business Network (EPBN), a consortium of European business organizations based in the Philippines, to continue supporting micro, small and medium enterprises (MSMEs) to increase their exports and investments.
Taus said the upcoming business summit will open dialogues between EU and the Philippines and will focus on the FTA pursuit.
The EPBN’s advocacy paper listed the priority areas of legislation to improve business environment and competitiveness.
Among these were the proposed amendments to the build-operate-transfer (BOT) scheme, the Retail Trade Act, the Government Procurement Reform Act, the Comprehensive Tax Reform, the Energy Efficiency and Conservation, Apprenticeship Bill, the Electricity Power Industry Reform Act, the Corporation Code, the Civil Aviation Authority of the Philippines Act, the Labor Code, the Whistleblower Protection Act, the Witness Protection Act, the Maritime Code, and the Immigration Code.
Jessen said trade relations between the EU and the Philippines remain strong, despite investors and potential market entrants taking a more cautious view on the country.
He also said the EU investors’ participation in the Philippines economy represents long-term investments and that “the everyday happening in the country” does not necessarily translate to posing questions as to whether or not to invest in the Philippines.
Jessen said the EU is “very committed to the 10-point economic agenda” of President Duterte.
He added that he recently met with the economic team of Mr. Duterte and that the EU was assured by the team that it is on track with the economic agenda and that the direction to a free-trade agreement with the EU is being encouraged.
Jessen said the EU wanted to contribute to the Philippines potential takeoff to becoming upper middle-income level.
“In 2015, our trade with the Philippines doubled in the last seven years to 13 billion euros [P705.9 billion] for goods and 3.3 billion euros [P179.19 billion] for services,” he said, noting that the trade surplus that the country had with the EU was mainly coming from the GSP+ perks.
Germany is the Philippines’s largest trading partner within the EU, followed by the Netherlands, France, the United Kingdom, Italy, Spain and Belgium.
Also, the former Nordic Business Council of the Philippines, NordCham Philippines, is bringing Nordic-Philippines business community with interests in maritime, energy, ICT and healthcare, Jessen said
European Chamber of Commerce in the Philippines (ECCP) Vice President Henry Schumacher said the EU-Philippine Business Summit on Monday, titled “EU-Philippines Economic Ties: A New Chapter Unfolds,” will be the first official dialogue of the EU with the Duterte administration.
In attending the summit, the participants can expect to learn about new business opportunities, find out more on the priorities of the new administration and Congress, and have opportunities to raise questions and participate in the open forum.
“The Philippines is expanding its bilateral ties with the one of the largest blocs in the world. In the first of half of 2016, we started the initial round of negotiations for the Philippines-EU Free-Trade Agreement (Afta), which is one of the priority trade agenda of the new administration. Both sides are already preparing the texts to be discussed in the second round of negotiation by the end of the year,” Trade Secretary Ramon Lopez said.