The Market Monitor Minding the Nation's Business
An official of the Department of Trade and Industry (DTI) quelled fears that the ban imposed by the European Union on imported agricultural products linked to forest degradation would affect the Philippines, saying the impact would be minimal.
“Our internal consultations have shown that the potential impact on our exports is minimal,” said Director Sherylyn D. Aquia of the DTI- Bureau of International Trade Relations.
Aquia said the government is “continuing to engage stakeholders on how future changes or expansion of regulation could adversely affect our exports,” she told Business Mirror.
The EU Deforestation Regulation (EUDR) is a measure that requires entities to demonstrate that their products are not linked to forest degradation particularly for coffee, cocoa, soy, palm oil, wood, rubber and cattle. The 27-member bloc European Union is set to implement this in December.
“We understand that the regulation reflects the preferences and demand of the EU consumers, and the EU’s advocacy on combating climate change,” she said.
Being a developing country, she noted that the Philippines “would need resources to comply and implement these policies.”
DTI-Export Marketing Bureau (EMB) Bianca Pearl R. Sykimte informed BusinessMirror recently that the top Philippine exports to the EU in 2023 were electronics, semiconductors, coconut oil and tuna.
Sykimte said these products accounted for more than 70 percent of total Philippine exports to the EU, amounting to $8.37 billion.
She also noted that the EUDR may provide opportunities for the country’s coconut oil exports to get a larger share of the EU market since the country’s palm oil competitors will be affected by the regulation.
Based on the data processed by DTI-EMB and obtained by this paper, coconut oil ranked third among the Philippines’s export products to EU, amounting to $547.15 million in 2023.
The value of Philippine coconut oil exports jumped by 56.8 percent year-on-year to $1.11 billion in January to July, data from the Philippine Statistics Authority showed.
This commodity posted the second-fastest growth rate among the Philippines’s goods exports.
Nonetheless, Sykimte said the DTI has been closely following developments on the EUDR so the government can prepare Philippine exporters
A recent Bloomberg report noted that the European Cocoa Association said in a letter to European Commission President Ursula von der Leyen that the absence of clarity of key elements in the EUDR has made compliance efforts “highly uncertain.”
The trade group, which represents top traders, including Barry Callebaut and Cargill Inc., called for an extension of the transition period for at least six months from its December 30 kickoff.
The report also noted that the letter came barely a week after German Chancellor Olaf Scholz pushed back against the regulation, adding to objections voiced by some nations, including Brazil, Indonesia, and Malaysia, which argue it will have a negative impact across global commodities markets.