Philippines

On 25 December 2014, the Philippines were granted GSP+ status and can since then benefit from duty reductions and suspensions granted under the regulation. The Philippines are considered a lower-middle income economy with a per-capita income of $3.950 in 2022. The EU imported a cumulative value of €10 billion worth of goods in 2022, of which approximately €3 billion made use of benefits under the GSP+ arrangement. This makes the Philippines the second largest beneficiary of the GSP+ arrangement.

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.

Philippines flag

At a glance: GSP+ beneficiaries' preferential imports to the EU

group

115,56 M

Population

account_balance
Presidential Republic

Government

trending_up

7.60%

GDP Growth

equalizer

3%

Inflation

money

$ 404,28 B

GDP

58 ^

Freedomhouse index

5 -

ITUC Global Rights Index

28.9 v

Environmental Performance Index

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 29% 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 61% of the GDP, followed by the industrial sector (29%). Agriculture contributes at 10% to the GDP while the sector 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 million metric tonnes per year.

Trade with the EU

Total trade with the Philippines summed up to € 18,381 million in 2022. With a share of 8% of the Philippines' overall trade, the EU is the fourth most important trading partner.

The Philippines and the EU (2022)

Imports from the Philippines by product section

Imports from the Philippines over time (in € m)

THE PHILIPPINES AND THE EU’s 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%.

36%

A little more than one third of the Philippines' current exports to the EU are eligible for tariff reductions under the GSP.

77%

The Philippines currently make use of the tariff reductions granted under the GSP+ for about 77% of their eligible exports.

Preference utilisation and export diversification

The Philippines' imports to the EU

Preference Utilisation vs. total eligible imports

The transition to GSP+ status in January 2015 marked the start for an increase in the Philippines' preference utilisation rate, which since then stands at an average of about 72%. Particularly products like coconut oil, preserved tuna, bicycles, pineapple products as well as garment and footwear benefitted from the transition to GSP+. Total imports from the Philippines increased by almost 20% between 2016 and 2018. Over this period, the Philippines substantially increased their imports of prepared meat and fish, footwear, machinery, furniture, and toys. In most of the major product groups, including animal and vegetable fats, food and beverages and processed meat and fish, reduced duties are consistently used for more than 96% of imports.

The largest product sections under the GSP+

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 (1) has been constructive and the Republic of the Philippines (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 Assistance

DG INTPA

Access all info about EU-Philippines relations on the International Partnerships website: https://international-partnerships.ec.europa.eu/countries/philippines_en

Opportunities in Philippines

  • Strong economic growth, one of the most dynamic economies in the region
  • Comparatively young (50% of the population is under 25), well-trained and English-speaking labour force
  • The country has substantial unexploited mineral reserves which have been estimated to about $840 billion

Contact points