Philippines

The Philippines was granted GSP+ status on 25 December 2014. As is required for GSP+ beneficiary countries, the country has ratified all 27 international conventions on human rights, labour rights, protection of the environment and good governance. The Philippines is classified as a lower-middle income economy with a per-capita income of $3,805 in 2023. Total EU imports from the Philippines amounted to €8.6 billion in 2023, the largest amount among all GSP+ countries; preferential imports using the GSP+ reached €2.0 billion in 2023, making the Philippines the second largest beneficiary of the GSP+ arrangement, after Pakistan.

What is the GSP+?

The GSP+ is a special incentive arrangement for Sustainable Development and Good Governance that supports vulnerable developing countries. Next to fulfilling the eligibility requirements of the Standard GSP, GSP+ countries are required to ratify 27 international conventions on human rights, labour rights, environmental protection and climate change, and good governance. In order to ensure effective implementation of the conventions as well as compliance with reporting obligations, the EU engages in monitoring activities with the GSP+ countries. GSP+ beneficiaries can benefit from complete duty suspensions for products across approximately 66% of all EU tariff lines.

At a glance: EU preferential imports from GSP+ beneficiary countries (2023, € million)

group

114.9M (2023)

Population

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Presidential Republic

Government

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5.5% (2023)

GDP Growth

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6.0% (2023)

Inflation

money

$ 437.1B (2023)

GDP

Facts about the Philippines' economy

Island Economy

The Philippines is a vulnerable island economy, which is strategically well located in close proximity to major regional markets. The location comes with a downside as the country is struck by five to six cyclonic storms every year. Landslides, recurring earthquakes, active volcanoes, and tsunamis pose additional risks to the Philippines.

Export Products

The Philippines' most important export products are electronic integrated circuits, storage units and other electronic parts. Bananas and crude coconut oil are the most important agricultural export products.

Trade Partners

A share of 31% (in 2023) of the Philippines' trade is accounted for by regional trading partners China and Japan. The US, followed by China and Japan, are the most important export destinations for products from the Philippines.

Economic Structure

Services account for 62% of the GDP (2023), followed by the industrial sector (28%). Agriculture contributes at 9% to the GDP but employs a quarter of the Philippines' population. The industrial sector focusses on the assembly of semiconductors and electronics, food processing, construction, textile, and garments, as well as basic metallic industries.

Coconut Production

The Philippines is the world's second largest coconut producer with a production volume of about 14.9 million metric tonnes in 2023.

Trade with the EU

Total trade with the Philippines amounted to €15.0 billion in 2023. With a share of 8% of the Philippines' overall trade, the EU is the fourth most important trading partner.

The Philippines and the EU

Imports from the Philippines by product section (2023, € million)

Imports from the Philippines over time (€ million)

THE PHILIPPINES AND THE EU GSP

Economic Impact

The Philippines have the highest degree of economic diversification among all GSP+ countries. The country's percentage stood at 79.9% in 2019 and, thus, approaches the threshold of 75%. Nonetheless, the Philippines can still be considered a vulnerable economy and the vulnerability score of 3.1% (2019) is still noticeably below the threshold of 7.4%.

32%

Share of the Philippines' exports to the EU that were eligible for GSP+ preferences in 2023.

73%

The Philippines's preference utilisation rate in 2023.

90%

Share of zero-duty imports from the Philippines.

Preference utilisation and export diversification

EU imports from the Philippines (€ million)

Preference utilisation (%) vs. total eligible imports (in € million)

GSP+-eligible imports from the Philippines have shown an upward trend over the years, reaching an all-time high of €3.8 billion in 2022 (although then dropping to €2.7 billion in 2023). The preference utilisation rate also increased over the longer term, from less than 70% around 2014 to almost 80% in 2022 (but again dropped in 2023, to 73%). Across product groups, fish & meat preparations, chemicals, and footwear all have utilisation rates above 90%, whereas the largest product group, machinery, had a below-average utilisation rate of 67% in 2023.

The largest product sections under the GSP+ (€ million, 2023)

EU preferential imports from the Philippines are relatively diversified. Animal and vegetable oils, electrical equipment as well as preparations of meat and fish are the dominant product sections that make use of the reduced duties. Machinery and appliance imports make up the largest share (67%) and is catching up with the preference utilisation rate. Preferences in this section are currently used for 77% of imports, in comparison to 63% in 2020. 99% of imported apparel, clothing, and other textile articles - which are 8th on the ranking of most imported products - are eligible for preferential duties, but the utilisation rate is only 32%

SUSTAINABLE DEVELOPMENT AND MONITORING PRIORITIES

The new Government, which came to power on 30 June 2022 through open and competitive presidential elections, has affirmed its commitment to the compliance with the GSP+ commitments since the beginning. Recent dialogue under the GSP+ framework as well as in other fora has been constructive and the Philippines has taken several steps to address points of concern. The situation continues to progress under the current administration.

Monitoring priorities during the reporting period 2024-2025

Accountability for extra-judicial killings, enforced disappearances, and red-tagging

Human rights defenders, freedom of the media and of expression

National preventive mechanism on torture

Freedom of association

Forced labour

Protection of minors and vulnerable individuals

Protection against labour discrimination

Implementation of climate conventions

Implementation of CITES and Cartagena Protocol on Biosafety

Drug control strategy

Anti-corruption

For the reporting period 2024-2025, the EU has focussed its monitoring activities on eleven priority areas. The conclusions from the previous mission, which took place when the former administration was still in power, showed a mixed picture with some positive developments under economic and social rights but continued violations of civil and political rights.

EU-Philippines Bilateral Development Cooperation

DG INTPA

Access all info about EU-Philippines relations on the International Partnerships website.