The Philippines-South Korea Free Trade Agreement takes effect on Dec. 31, 2024, immediately reducing tariffs by 6 percent on major products, providing a significant advantage to Filipino exporters.
“Upon effectivity, South Korea will grant preferential duty-free entry on 11,164 Philippine tariff lines accounting for $3.18 billion or 87.4 percent of total South Korean imports from the Philippines,” said Department of Trade and Industry Undersecretary for International Trade Group (ITG) Allan Gepty.
He said a major beneficiary is the Philippine banana industry, which is set to gain progressively from the agreement. By Dec. 31, 2024, banana tariffs will drop by 6 percent, with an additional 6-percent cut the next day (Jan. 1, 2025).
Over the next five years, the tariff rate for banana exports will be reduced to zero, giving the Philippines a competitive edge in the South Korean market.
“This incremental tariff cut paves the way for zero tariffs in the long term, significantly boosting the competitiveness of our agricultural products, especially bananas,” Gepty said.
DTI Secretary Ma. Cristina Roque, meanwhile, provided updates on the Comprehensive Economic Partnership Agreement (CEPA) with the United Arab Emirates.
“We are in the final stages of negotiations. There’s some back-and-forth, but we’re optimistic about finalizing the CEPA by the first half of 2025,” she said.
Roque said that while CEPA is crucial, the Philippines continues to attract investments through other measures such as CREATE (Corporate Recovery and Tax Incentives for Enterprises) and additional investment incentives.
She expressed optimism that the CEPA could be finalized by the first half of May 2025, enabling its swift implementation.
The PH-UAE CEPA is a proposed FTA designed to enhance trade and investment relationships between the Philippines and the UAE, facilitate the export of goods and services, boost investment prospects and open up more opportunities for Filipino professionals and service providers in the UAE and the broader Gulf region.
The CEPA aligns with the Philippines’ trade strategy to explore new markets, as outlined in the Philippine Development Plan 2023-2028 and the Philippine Export Development Plan 2023-2028.
