PEDP Strategy 6: Exploit current opportunities and explore new ones
Business Mirror
July 20, 2016
IN 2015 the Philippines’s top 3 export markets were Japan, China and the United States. These three markets contributed 47 percent to total exports. Other markets in the top 10 ranking were Hong Kong, Singapore, Germany, South Korea, Thailand, Taiwan and the Netherlands. Together, these top 10 markets comprised 83 percent of total Philippine exports.
The Philippine Export Development Plan (PEDP) 2015-2017 addresses this need to diversify and expand export markets. Market diversification has become even more imperative today with the current global economic slowdown. This is embodied in Strategy 6, which aims to take advantage of the opportunities brought about by Association of Southeast Asian Nations (Asean) integration, free-trade agreements (FTAs) and other preferential trading arrangements (PTAs).
At present, aside from its FTA with the nine member-states of Asean, the Philippines is a signatory to Asean’s FTA with China, Japan, South Korea, India, Australia and New Zealand. The Philippines also has a bilateral agreement with Japan, and recently signed an FTA with the European Free Trade Association (Efta), composed of Iceland, Liechtenstein, Norway and Switzerland, which is still undergoing ratification. These FTAs provide for market access for Philippine goods and services.
The Philippines also enjoys preferential tariffs for certain goods under the Generalized System of Preferences (GSP) granted by donor-countries, which include the European Union (EU) and the US. In December 2014 the EU included the Philippines in its GSP+ scheme, which grants zero tariffs to 6,274 products. Last year the US reinstated its GSP, which eliminated duties on about 5,000 products coming from the Philippines.
As more than half of Philippine exports are with FTA partners and GSP donor-countries, exporters are encouraged to make use of these preferential arrangements to make their products more price-competitive and to expand their shares in these markets.
Exporters are also being alerted to prepare for market openings to be brought about by other FTAs currently being negotiated by the Philippines, like the Regional Comprehensive Economic Partnership Agreement, or RCEP, which is with Asean and its six partner-economies (China, Japan, South Korea, India, Australia and New Zealand), and the Philippines-EU FTA.
Information on these preferential trading schemes is being made available to stakeholders by the Export Marketing Bureau of the Department of Trade and Industry, through its Doing Business in Free Trade Areas (DBFTA) program. The DBFTA is a business-education program that aims to inform businesses of the benefits of FTAs. It has recently expanded to include sessions on Asean integration and GSP schemes.
In addition to these preferential trading areas, the PEDP also targets the development of new and upcoming exports markets, like Iran, Israel and South Africa, to increase exports.□
Rafaelita C. Castro , Chief, Market Innovation Division, Export Marketing Bureau, Department of Trade and Industry