Philippines implements Free Trade Agreement with South Korea
President Ferdinand Marcos Jr. recently enacted a significant trade agreement, boosting economic ties between the Philippines and South Korea. The move, formalized through Executive Order 80, implements the schedule of tariff commitments under the newly ratified Philippine-Korea Free Trade Agreement (PH-KR FTA).
The executive order, released on a Saturday, clarifies the new tariff structure. “All originating goods from the Republic of Korea listed in the aforementioned Philippine Schedule of Tariff Commitments under Section 1 hereof, that are entered into or withdrawn from warehouses or free zones in the Philippines for consumption or introduction to the customs territory, shall be levied the rates of duty as prescribed therein, subject to the submission of a Proof of Origin, in compliance with all applicable requirements under the PH-KR FTA,” the order states.
This landmark agreement,signed during the 43rd Association of Southeast Asian Nations Summit in Indonesia last September 2023,promises to significantly enhance the economic partnership between the two nations.The PH-KR FTA aims to streamline trade by reducing and eliminating many tariff barriers.
The Philippine Senate’s approval of the FTA via Senate Resolution 1188 on September 23, 2024, followed President Marcos’ ratification on May 13, 2024. this bipartisan support underscores the agreement’s importance to the Philippines’ economic future.
President Marcos himself highlighted the agreement’s potential benefits. “The FTA will strengthen our bilateral trade and investment relations with the Republic of Korea especially as it generates jobs and contributes to the Philippines’ value proposition as an ideal regional hub for smart and sustainable investments,” he stated.
The economic impact of this agreement is significant. In 2022, bilateral trade between the Philippines and South Korea reached a remarkable $15.44 billion, establishing South Korea as the Philippines’ fourth-largest trading partner, according to the Department of Trade and Industry. Key Philippine exports to South Korea include integrated circuits, semiconductors, and bananas.
This agreement’s implications extend beyond the Philippines and South Korea. The increased trade and investment could serve as a model for other free trade agreements in the region, possibly stimulating economic growth and job creation across Southeast Asia. For U.S.businesses,this enhanced trade relationship could open new opportunities for collaboration and investment in the burgeoning Asian market.
The implementation of the PH-KR FTA marks a significant step towards a more integrated and prosperous Asia-Pacific region, with potential ripple effects felt globally.
