Philippine manufacturers must improve the quality of their products to compete in the global market, the Trade department said, amid lower duties arising from various free trade agreements (FTAs) and preferential schemes.
“With the decrease in tariffs of most traded products, competition is no longer limited to who can offer the lowest price but who can conform or surpass the standards of international markets as well,” said Agnes Legaspi, assistant director at the Department of Trade and Industry’s (DTI) Export Marketing Bureau (EMB), in a statement.
Legaspi, at a recent Doing Business in Free Trade Areas (DBFTA) session, emphasized the pressing need for local firms to improve their products and at least be at par globally, particularly in markets covered by existing FTAs.
DBFTA participants from various industries were also introduced to different export windows like the Generalized System of Preferences (GSP), with the European Union’s GSP Plus (EU-GSP+) as the most prominent preferential system that offers up to zero tariffs on products from developing countries.
The Philippines has been a beneficiary of the EU-GSP+ since December 2014, allowing the country to export 6,274 eligible products duty-free access to the EU market.
Other GSP arrangements allow Philippine products into large markets such as the United States and Canada at preferential duties.
At present, the Philippines is part of FTAs involving the Association of Southeast Asian Nations (Asean), as well as existing agreements with China, South Korea, Japan, India, Australia and New Zealand.
The Philippines is also involved in a bilateral trade deal with Japan, called the Philippine-Japan Economic Partnership Agreement (PJEPA).
Legaspi said various trade agreements were helping local goods enter various partner markets, while also enabling foreign-made goods to compete in the domestic market and potentially take up significant market share given the Filipinos’ penchant for imported products.
“As tariffs go down, we need to work more closely with Philippine businesses to help them navigate the rules of origin requirements and to hurdle other barriers, for instance product standards,” Trade Undersecretary Ceferino Rodolfo said in a separate briefing for exporters held in Davao City recently.
The DTI said the country needed to cultivate a different mindset focused on making the Philippines a source of excellent brands that surpass “even the most stringent standards of foreign markets.”
It is targeting 8 percent to 9 percent export growth this year following a 5.6 percent decline in 2015. The 2016 goal is higher than the government’s projection of 5 percent.