Survey Report on the Use of Free Trade Agreements in the Philippines

Rafaelita Aldaba, Erlinda M. Medalla, Josef T. Yap, Mureen Ane D. Rosellon, Fatima Lourdes E. del Prado, Melalyn C. Mantaring and Veredigna M. Ledda

from Economic Research Institute for ASEAN and East Asia (ERIA)

Abstract: The Philippines involvement in the free trade agreements (FTAs) has mainly been as a member of ASEAN, though the ASEAN Free Trade Area (AFTA) and through the various ASEAN+1 agreements, and a lone bilateral free trade agreement with Japan. While the Government of the Philippines is expected to progressively reduce preferential tariffs to zero, Philippine firms have historically been slow to take advantage of FTAs. This survey reaffirms that this awareness and the utilisation of FTAs need significant improvement among manufacturing and services firms. As the main source of information for FTAs, the government needs to increase the efficiency, scope, and reach of its promotional and technical training programmes and to rely further on technology to deliver results. These efforts to enhance FTA utilisation are directly linked with the easing of rules of origin (ROO) compliance and administration. At the national level, these efforts include reforms to promote electronic Certificates of Origin (COOs) and self-certification, and linkage to the national single window. This will improve timelines and ease the entry of micro, small, and medium-sized enterprises. Regional efforts to harmonise ROOs can increase FTA utilisation across ASEAN member countries and pave the way for the forthcoming Regional Comprehensive Economic Partnership (RCEP).

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