The Philippines could generate P150 billion to P200 billion worth of foreign direct investments (FDI) within three years from the free-trade agreement (FTA) with South Korea, which is expected to be signed in November, according to the Department of Trade and Industry (DTI).
Ceferino Rodolfo, the Undersecretary for Industry Development and Trade Policy Group of DTI, gave an estimate of “between P150 billion-P200 billion in three years,… particularly from the electric vehicle value chain [and perhaps] in agricultural processing.” Under the EV value chain, Rodolfo said, wiring harness is included
The Trade undersecretary told reporters at the sidelines of the launch of the World Bank’s report, “A New Dawn for Global Value Chain Participation in the Philippines,” that “hopefully” the FTA between the Philippines and South Korea will be signed in November as they already moved past the “legal scrubbing.”
In fact, Rodolfo will be flying to South Korea from October 14 to 17 for a Joint Economic Cooperation (JEC) which includes a meeting with his counterpart “for the FTA to prepare for the signing.”
The Trade official also divulged, “we’re happy that we were able to secure…it would be bananas and processed pineapple.” Rodolfo stressed that this will be very critical for the Philippines because in terms of trade value, this is huge and this is where the country is “competitively disadvantaged” in relation to Vietnam.
He said Vietnam’s tariffs are continuously declining because of the Vietnam-South Korea FTA that it signed in 2015. As for the Philippines, the Trade undersecretary said without the FTA, the country’s banana exports “would be at 30 percent.” However, Rodolfo noted that if the country can sign the FTA this 2022, “hopefully [it would] enter into force in 2023 so within five years, 30 percent [of our tariffs] would be declining until [it reaches] zero on the fifth year.”
With this arrangement, Rodolfo stressed that the Philippines could lessen its “competitive disadvantage” in terms of tariff.
The undersecretary added that ahead of the signing of the FTA, “we are already working with the [Department of Foreign Affairs] DFA so that we can already prepare for the requisite certificates of concurrence by the agencies,” to be followed by the “submission to the Office of the President and determination also by the DFA” of what else needs to be done
Meanwhile, Rodolfo also pointed to the significance of the Economic and Technical Cooperation chapter which he said contains “strong provisions on collaboration on green technology including on electric vehicles.”
In general, such would be in “industrial manufacturing and in particular electric vehicles,” adding that the Philippines is focused on battery technology,” Rodolfo said on Thursday.
The Philippines is after battery technology because the country boasts “one of the biggest battery energy storage systems projects” in the world. Rodolfo noted that the operation of the Battery Energy Storage (BES) facility is “continuous.”
In fact, Rodolfo said, “there are two companies in the Philippines in that space and both of them have bought batteries from Samsung SDI of Korea.”
However, he noted that Korea has been importing nickel battery precursor from China “but if you look at the trade profile of China, China has been importing nickel ore from the Philippines.”
He added, “They supply, I think, 60 plus percent of China’s imports of nickel ore so bakit hindi nalang tayo dumiretso [why don’t we just deal straight with them], so we can shortcut, we can further collaborate because there is clear synergy in this.”
Apart from these, the Trade official noted that health and biologics is also important since South Korea is “very strong” on test kits and vaccines.
According to the DTI web site, the PH-KR FTA Negotiations was launched in 2019 in Seoul, South Korea by former Trade and Industry Secretary Ramon M. Lopez and Ministry of Trade, Industry and Energy (MOTIE) Minister for Trade Yoo Myung-hee, recognizing the potential of both countries to advance economic relations by enhancing trade and investment flow between the two nations “through removal of impediments to closer trade and creation of business and investment opportunities.
The Trade department noted that in negotiating the FTA, the Philippines’s objectives include securing improved market access for agricultural products such as bananas and other tropical fruits, as well as industrial products and other services
The DTI earlier said that once enforced, the FTA will be an “important vehicle” for improving the balance of trade with Korea through enhanced trade flows, facilitating the movement of natural persons, and generating more investment opportunities and by extension, job generation possibilities.
Source: BusinessMirror
Share:
<p>Time: November 2025<br /> By: WTO and International Trade Group, Legal Department – VCCI</p>
