TRADE and investment between the European Union (EU) and the Philippines “can easily double” in the near term, according to the delegation of the EU to the Philippines.
“The EU and the Philippines enjoy strong commercial relationship. However, it is underutilized as far as the trade and investment agenda is concerned. My personal conviction is that we could easily double the amount of where we are today. Today the message we’re sending home is that this is a good time to invest in the Philippines,” said the head of the Economic and Trade Section of the EU Delegation, Walter van Hattum, during a trade and investment forum held on Thursday.
Trade exchanges, as of 2013, reached €11 billion, with a 20-percent growth likely to be seen by year-end, according to the EU delegation. In terms of investment stock, roughly around 30 percent of foreign investment flowing into the country is of EU origin. Most investments of the EU in
the Philippines are in energy, manufacturing and business-
process outsourcing.
However, van Hattum said both trade and investments between the Philippines and the EU are dwarfed by the performance of other Asean countries.
This, van Hattum said, should be seen as motivation for the Philippines to seize opportunities of closer engagement with the EU.
Opportunities for the Philippines specified by the economic and trade counselor include higher foreign direct investment (FDI) flows, more competition in the local market and buttressing of the export sector of the Philippines. For the EU, there is an opportunity in securing a foothold in the Philippines, given its strategic position in the Asean and its steady economic growth, van Hattum added.
Steps are being taken in the right direction, according to the EU official, as Congress is working on economic reforms that can allow entry of more FDI to the country. European firms are keeping a close eye on the legislative progress of the reforms, “which, ultimately, can better the investment
climate,” he added.
“That’s an area in trade policy or agenda that has room for improvement: openness to FDI; Some of our colleagues in Congress are looking to change some of the current restrictions on foreign investments, and that will be the main driver of establishments of companies,” van Hattum said.
Other areas for improvement include diversification of exports and value-added trade.
Bilateral trade between the Philippines and the EU in the first six months reached over $7 billion, a 21-percent increase over the same period last year, EU Ambassador to the Philippines Guy Ledoux said.
Top exports of the Philippines to the EU include electronics, appliances and photographic instruments, optical instruments and food. Imports of the Philippines from the EU include aircraft, machinery, pharmaceutical products, optical instruments, chemical and vehicles.
In terms of investment, inflows to the Philippines from the EU went up by 150 percent in the first quarter of 2014. The Philippines, on the other hand, invested nearly €1.4 billion in the regional bloc.