‘European Union now ties with US as PH’s 3rd biggest trading partner’
Bilateral trade of goods between the European Union (EU) and the Philippines rose 16 percent to a historic high of 12.5 billion euros, while trade in services surged 17 percent to 3.1 billion euros in 2014, the EU-Philippines fact file released on Monday by the EU delegation showed.
The exchange resulted in a surplus of 1.1 billion euros in goods for the EU and a surplus in services and trade of more than 300 million euros for the Philippines, the report said. The publication describes and analyzes economic trends in EU-Philippines relations with updated statistics from 2014.
The EU record shows the resulting trade improvement puts the bloc at par with the US as the Philippines’ third biggest trading partner, after Japan and China, it said.
“The commercial and political ties between the European Union (EU) and the Philippines have existed for centuries and have grown into today’s substantial relationship with trade in goods and services at historical highs of 12.5 billion euros and 3.1 billion euros respectively,” Guy Ledou, EU Ambassador to the Philippines, said.
EU Trade Commissioner Cecilia Malmström said the EU-Philippines relations have become essential to the region.
“The European Union is the world’s largest economy and the rise of Asia is the most important economic and political story of our time. And the Philippines is playing its part in it. The Philippines is providing very positive signals in terms of performance on economic reforms, growth and improved business climate and I look forward to a deeper engagement.”
With the recent granting of further preferences under GSP+, the special incentive arrangement for sustainable development and good governance to the Philippines and parties agreeing to undertake preparatory work to explore the possibility of further deepening EU-Philippines trade relations through a bilateral free-trade agreement, a lot more is to be expected in the years to come, the fact file said.
Started in 2011, EU’s exports of goods to the Philippines have since gained pace to reach 70 percent and in 2014 made the EU the second biggest source of imports by the Philippines, after China.
The trade flows are partly due to robust growth in the Philippine economy by 6.1 percent in 2014 and 6.7 percent as projected for 2015. That is supported by sound macroeconomic policies as evidenced by ratings and indices upgrades, population and middle class growth, economic reforms (liberalizing financial and other sectors) and government spending on infrastructure, the publication said.
Economic recovery in the EU at 1.4 percent likewise meant increased demand for products from the Philippines, as well as a new surge in reported foreign direct investment (FDI) into the Philippines at over 800 million euros, or 26 percent of the total inflows into the country in 2014.
In 2014, key exports by the EU to the Philippines included electronics, chemical products, industrial equipment, transport equipment, metal products, paper products, cereals, meat, dairy, and animal feeds, while the Philippines’ main exports to the EU included electronics, coconut oil, transport equipment, clothing and textiles, fishery products, metal products, industrial equipment, and fruit products. Trade in services is dominated by transport (sea and air), as well as business processing outsourcing and finance.
In terms of foreign direct investment, the EU was the largest investment partner of the Philippines in 2014, providing more than 26 percent of overall flows into the country and adding to the 450,000 jobs already provided by current investors.
Also last year, the EU became the fourth largest source of tourists to the Philippines, overtaking China, with a record number of 400,000 tourists. In 2014, the European Union also became the fourth largest host of land-based migrant Filipinos and the largest employer of Filipino seafarers. Filipino migrants living and working in the EU, as well as Filipino seafarers manning European ships, sent $3.35 billion back to their country in 2014, making the EU the second largest source of remittances to the Philippines.