By Justine Irish D. Tabile, Reporter
EUROPEAN BUSINESSES remain confident about setting up operations in the Philippines due to recent reforms and negotiations for a free trade agreement (FTA), the European Union-Association of Southeast Asian Nations Business Council (EU-ABC) said.
“European businesses remain confident… in the direction of travel under the Marcos administration,” EU-ABC Executive Director Chris Humphrey told BusinessWorld.
“And they remain confident because we do have those ongoing FTA negotiations with the European Union,” he added.
He said that the reform agenda of the Marcos administration will help improve the ease of doing business, an ongoing concern for European businesses with operations in Southeast Asia.
“I think there’s always room to improve the ease of doing business in any economy in Southeast Asia. That is true in the Philippines as well,” he said.
“But the reform agenda that the Marcos administration has been undertaking makes life easier for European businesses,” he added.
He said the amended Investor’s Lease Act and reforms pushing the green economy and green energy are making the country a more attractive destination.
He also said the FTA, which both sides hope to complete by the end of next year, is expected to address some of the barriers to entry for European businesses as well.
“If you take a broader look between Europe and Vietnam with their FTA, we saw trade accelerate, and we saw investments from Europe into Vietnam accelerate as well,” he added.
With FTA negotiations ongoing, he said there is plenty of room for expansion in Philippine-EU trade.
“The Philippines already enjoys the Generalised Scheme of Preferences Plus (GSP+), and you will lose that at some point by virtue of your own economic development. So you need the FTA in place to help boost trade going forward,” he said.
“I actually do think trade and investment between Europe and the Philippines is below where it should be. And putting a comprehensive FTA in place will mean that trade will go up in the future,” he added.
Asked what sectors European businesses are interested in with regard to Philippine operations, he said they will skew towards high-end sectors.
“It’s a broad range of sectors like semiconductors, maybe the automotive sector as well, and high-end electronics, but also agriculture as well. I think there’s plenty of scope for the EU to source more agricultural products from the Philippines,” he said.
He also said that the Philippines can look at the EU as an alternative market amid the plans of the US to impose tariffs on chips.
“If the US starts pricing itself out of markets because its tariffs are too high, businesses and countries will look to other export markets for their products. And I think that’s true for the Philippines. It’s true for anywhere in Southeast Asia,” he said.
“If you’re looking at things like semiconductors, well, Europe has a huge need for them. There is naturally another market there for any Philippine production to look at,” he added.