MANILA — Philippine exports to the European Union (EU) under the Generalized Scheme of Preferences Plus (GSP+) have been increasing since the country’s acceptance into the preferential tariff scheme in December 2014.
EU Ambassador to the Philippines Franz Jessen welcomed this development, noting that the GSP+ also helped the government improve the lives of the country’s poorest sectors.
“The objective with the GSP+ is two-fold: to promote trade and promote the economic sustainability for a number of sectors,” Jessen said in an interview with the Philippine News Agency.
“And the other aspect is much of the 27 international conventions,” he added.
Data from the EU Delegation to the Philippines showed that the estimated annual growth of Philippine exports to the 28-member trading bloc under the GSP+ was at 21 percent in 2017.
Exports revenue breached the 2-billion euro mark last year, amounting to 2.1 billion euros (PHP120 billion).
In 2014, Philippine exports under the EU GSP+ were at 1.22 billion euros. They grew to 1.58 billion euros in 2015, and to 1.66 billion euros in 2016.
Helping the poorest sectors
Walter van Hattum, head of economic and trade section of the EU Delegation to the Philippines, noted that about PHP60 billion of the country’s exports to the EU under the GSP+ were agricultural and food products from one of the sectors in the country where there is a prevalence of poverty.
Most of these products were sourced from Mindanao, wherein poverty is also high.
In 2015, 34.3 percent of the poor were farmers and another 34 percent were fishermen, according to data from the Philippine Statistics Authority (PSA).
In the same year, 14 out of 30 poorest provinces in the country were in Mindanao.
Jessen said the EU continues to work with the Philippine government, local business chamber and export-related organizations to promote the awareness on GSP+ throughout the country in an effort to maximize the utilization of the trade benefits.
Under the EU GSP+ scheme, 6,274 goods from the Philippines enter the EU market at zero duty. This eliminated import duties for 66 percent of tariff lines.
“I like the GSP+ because it’s sustaining the livelihood of the poor segment of the society. I see it very much hand in hand with the government’s pro-poor agenda,” said the envoy.
Demand for Philippine coffee
Jessen said major European coffee companies are interested now in Philippine coffee, which is included in the list of duty-free products under the EU GSP+.
“We can enhance cooperation in that sector,” Jessen said.
“That’s diversifying your exports. And the partnership with new investors, we can bring in new technologies in the coffee industry,” van Hattum echoed.
PSA data showed Friday that Philippine exports to the EU in 2017 rose 32.8 percent to USD9.26 billion from USD6.97 billion the previous year.
This made the EU as the second top destination for Philippine exports last year from being the fourth export destination for Philippines goods in 2016.
The Philippines enjoyed higher trade surplus with the EU in 2017, reaching USD2.17 billion from USD227.74 million in the previous year.
Adhering to 27 int’l conventions
For the Philippines to sustain its GSP+ status, the EU ambassador stressed the country should adhere to the 27 international conventions.
Jessen said the EU is closely cooperating with the Philippine government to make sure that the international conventions that the country has signed up to are “being implemented and taken forward in a constructive manner”.
He clarified that it is not only the human rights issues that the EU is looking at, but the bloc also assesses the country’s adherence on conventions on labor rights, environment, and good governance.
“We’re not here to criticize the Philippines,” the envoy stressed.
“What we do is we work hand in hand with the Philippine government and also with the sectors in the society where we think they needed the assistance, be it in the form of trade preferences or be in form of development assistance,” Jessen said.
“Our view is that less corruption we have in a country, there’s bigger opportunity for economic development. The stronger protection you have for the rights, the better for development,” he added.
Jessen said the EU Parliament will be meeting on Feb. 20 when it is set to discuss the monitoring of key issues in the Philippines.
“We have ongoing dialogue with the (Philippine) government to make sure that we have correct understanding of the situation in the country. Because it’s not only how we see things in the surface but how the reality is, so we need to have a dialogue with the government to make sure we get the whole picture,” the envoy said.