The Philippine Economic Zone Authority (PEZA) expects a surge in European capital as the government nears a landmark free trade agreement (FTA) with the European Union, a deal officials say will cement the country’s status as a regional manufacturing hub.

PEZA Director General Tereso Panga said the investment promotion agency (IPA) is bracing for a new wave of European firms seeking to establish or scale up operations once the Philippines-EU FTA enters into force.

Panga said these new investments will “create more jobs for Filipinos, boost economic growth, and further strengthen [the country’s] position as a key investment hub.”

“As both sides move closer to concluding the PH–EU FTA negotiations, PEZA remains committed to translating economic cooperation into measurable outcomes,” he said.

Trade Secretary Cristina Roque, who chairs the PEZA Board, earlier said that negotiations for the FTA with the EU are expected to be completed before the end of the year.

She said the trade pact's entry into force is set for 2027.

Both the Philippines and the EU are racing to complete the FTA by next year, preferably before the scheduled conclusion of the Generalized Scheme of Preferences Plus (GSP+) arrangement.

The Philippines is the only Southeast Asian country with active GSP+ status, allowing the duty-free entry of more than 6,000 products into the 27-member bloc.

The GSP+ benefited approximately €2.2 billion, or roughly $2.59 billion, worth of Philippine exports in 2024, with strong participation from domestic micro, small, and medium enterprises (MSMEs).

Under the FTA, Roque has said this could unlock $12 billion in additional export potential, especially since it would address compliance challenges.

Based on PEZA data, the country’s ecozones currently host more than 190 companies with European investment.

These firms have a combined investment of over ₱400 billion and generate around 430,000 jobs nationwide.

With the potential for new investment, Panga said the agency remains committed to helping companies integrate into global value chains through the export-oriented ecosystems of ecozones.

To this end, PEZA recently engaged with the delegation of the European Parliament Committee on International Trade (EU-INTA) as part of the latter’s trade mission to advance the FTA.

During this meeting, the agency said its roadmap toward full systems automation across its ecozones was cited by the delegation as a strong measure to further strengthen the country’s anti-corruption and anti-red tape efforts.

Panga said this further underscores the country’s position as a competitive partner of the EU in Southeast Asia.

“This is a meaningful signal for 2026–2030 planning, as we in PEZA are diversifying our supply chain to strengthen our resilience and stability especially in an increasingly uncertain global environment,” he said.