The European Union (EU) delegation in Manila said it is wrong for the government and the private sector to belittle the benefits that the country is getting from the EU’s Generalized System of Preferences Plus (GSP+) scheme, which could be lost anytime soon due to the bloc’s concern over the Duterte administration’s bloody war against illegal drugs.
In response to the Philippine Exporters Confederation Inc.’s (Philexport) remarks on the country’s perceived minimal gains from the GSP+, the EU delegation in Manila said the value of Philippine goods entering the EU duty-free through the preferential trade scheme is gradually increasing.
This proves the advantage gained by Philippine exporters over their peers in accessing the European market. The EU-GSP+ also made the EU market the top destination for certain Philippine products.
“In 2016 total exports of the Philippines to the EU under the GSP+ amounted to €1.662 billion [P91.4 billion], or 26.3 percent of the total Philippine exports to the EU. Both in absolute and in relative [utilization rates] terms, this was an increase compared to 2015,” said Walter Van Hattum, economic counselor at European delegation in Manila.
In 2015 Philippine exports under the GSP totaled €1.56 billion, Van Hattum added.
Earlier this week, Philexport President Sergio Ortiz-Luis Jr. said Philippine exports for the rest of the year will continue to grow at a steady pace, even if the country loses its trade privileges from the EU.
This, Ortiz-Luis said, is because the Philippines has not fully taken advantage of the GSP+ scheme, which has been in place since December 2014.
“We have not really taken advantage of the [GSP+ scheme], because from what I understand, only garments would really benefit from it. But it seems it’s not being used, so there won’t be much of a difference [if it is scrapped],” Ortiz-Luis told the BusinessMirror.
While export receipts in the second quarter are usually “tempered”, Ortiz-Luis said he remains confident that shipments would post double-digit growth by the end of the year. The EU-GSP+ allows the Philippines to export 6,274 products to the EU duty-free. Manila is the only one in the region that was accorded this privilege, giving Philippine exporters a good advantage. Van Hattum said exporters of garments/textiles/footwear benefit have shipped around €113 million worth of products to the EU using this scheme.
Also benefiting are: Vegetable fats and oils (€459 million); preparations of meat, fish, etc. (€123 million); preparation of vegetables, fruits, nuts, plants (€80 million); organic chemicals (€41 million); chemical products (€82 million); rubber and articles (€60 million); machinery and mechanical appliances (€227 million); and optical instruments (€87 million).
“Looking forward to 2017, we don’t have detailed figures yet on GSP utilization. But in terms of sectors where the Philippines scores relatively well compared to 2016, these include preparations of meat, of fish or of crustaceans, as well as preparations of vegetables, fruit, nuts or other parts of plants. These have relative strong increases compared to 2016 as proportion of total exports to the EU,” Van Hattum added. Other “GSP+ sectors” remain stable in terms of proportion of overall exports to the EU, meaning benefits would grow with the overall growth in exports to the EU, which was 42.8 percent compared to 2016.
Earlier, Senate sources told the BusinessMirror President Duterte’s decision to reject grants from the EU also put at risk the future of Philippine companies that depend on the tariff-free privilege they are enjoying in exporting to Europe.