FOR THURSDAY ISSUE
The Philippines' banana exports to South Korea will enjoy zero tariffs over the next five years, following the bilateral free trade agreement (FTA) taking effect in January next year.
Department of Trade and Industry (DTI) Secretary Maria Cristina A. Roque said at a press briefing last week that the current 30 percent tariff on bananas will gradually decrease to zero starting Jan. 1, 2025.
Roque noted strong interest in Philippine products such as coconut, mangoes, and especially bananas, under the new FTA with South Korea.
"Starting next year, the banana tariff will decrease by six percent annually, which will significantly lower banana prices for [South] Korea,” Roque said.
"This is particularly promising for banana exports, as [South] Korea is a major importer of bananas. It's a development we're excited about, as it will benefit both the export market and our trade with [South] Korea,”
Roque, who also chairs the Board of Investments (BOI), said the agency is prioritizing trade missions and discussions to target specific countries and industries.
"Recently, we talked about the countries we want to focus on and the key sectors to target, such as manufacturing," Roque said. "We need to assess sales and identify potential investments that could come in."
Roque also reported ongoing discussions with Japanese, Israeli, and Indian officials regarding potential investments in agriculture, healthcare, and pharmaceuticals.
Economic partnership deal
In a related development, Negotiations for the Middle East Comprehensive Economic Partnership Agreement (CEPA) are in their final stages, with a few details remaining to ensure a mutually beneficial agreement.
"We are almost there and should be able to finalize everything soon," Roque explained. "However, negotiations require a back-and-forth process to ensure a win-win outcome for both countries."
When asked about the CEPA's timeline, Roque confirmed it would not be finalized this year. While unable to provide an exact date, she confirmed the CEPA is nearing completion, with just a few details being "ironed out" since negotiations began four months ago.
"Negotiations take time, sometimes years," Roque asserted, while assuring the public of swift action.
Roque hopes negotiations will be completed by next year, but it depends on ongoing discussions.
"There is no delay," she explained. "Many products are involved. We want to export to them, especially with the large Filipino community there. They are also interested in exporting to us; our population of 115 million makes the Philippines an attractive market."
Roque noted that while a CEPA can attract investments, it is not the only factor. Investors are also drawn to incentives like the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law.
"Investment is not solely dependent on the FTA or the CEPA," Roque stressed.
The Philippines and the United Arab Emirates (UAE) signed the CEPA during the 28th Conference of the Parties (COP28) in December last year.
According to DTI, the CEPA with the UAE aligns with the Philippines' trade strategy to expand into new markets, as outlined in its six-year development and export plans.