By John Victor D. Ordoñez, Reporter
THE SENATE on Monday ratified the free commerce settlement (FTA) between the Philippines and South Korea, a transfer that can pave the best way for elevated exports of Philippine bananas and processed pineapples to Seoul.
Twenty-one senators voted in favor of the ratification of the free commerce pact, which is able to take away Philippine tariffs on 96.5% of products from South Korea, whereas Seoul will raise tariffs on round 94.8% of Philippine merchandise.
The Structure requires concurrence by two-thirds of the Senate’s members for ratification of worldwide agreements and treaties.
The Philippines and South Korea signed the free commerce pact in September final yr, which is able to enhance commerce between the 2 international locations.
Nevertheless, the deal continues to be present process the ratification course of on the Korean Nationwide Meeting.
Beneath the deal, the Philippines secured the elimination of 1,531 tariff traces on agricultural items, of which 1,417 can be eliminated after the FTA enters into power.
It can additionally take away 9,909 tariff traces of business items, 9,747 of which might be eliminated after the deal enters into power.
“It presents a possibility to broaden the variety of our commodities that may entry the Korean market,” Philippine Chamber of Commerce and Business President Enunina V. Mangio advised BusinessWorld in a Viber message.
“To completely benefit from the FTA, we must always enhance our infrastructure and regulatory surroundings to draw investments from Korea.”
She additionally cited the necessity for the federal government to improve the technological capabilities of native industries to make them extra aggressive.
South Korean automakers are anticipated to learn from the FTA, which is able to take away the 5% import duties on Korean-made cars. Tariffs on Korean electrical and hybrid automobiles would even be eradicated inside five years.
The Philippines is anticipated to draw as a lot as P200 billion value of overseas direct investments for the electrical car business and agricultural processing sector inside three years, in line with estimates from the Division of Commerce and Business.
The Philippines can also be seen to extend banana and processed pineapple exports to Seoul. Tariffs on Philippines bananas, which at the moment have a 30% tariff, might be eliminated inside five years. On the similar time, the 36% tariff on processed pineapples from the Philippines might be eliminated in seven years.
“This can be a good growth for our banana and pineapple industries as they’ll get a much bigger market in South Korea,” former Agriculture Undersecretary Fermin D. Adriano stated in a Viber message.
Primarily based on knowledge from the United Nations Commodity Commerce Statistics Database, South Korea was the Philippines’ third-biggest marketplace for recent banana final yr with exports reaching $164.54 million, after China ($359.77 million) and Japan ($562.58 million).
South Korean Ambassador to the Philippines Lee Sang-hwa beforehand stated that he’s banking on the FTA to be a “game-changer” for commerce and funding between Manila and Seoul.
In 2023, South Korea was the Philippines’ fifth-largest buying and selling associate with whole commerce reaching about $12 billion, in line with knowledge from the Philippine Statistics Authority. Exports to South Korea final yr have been valued at $3.53 billion, whereas imports have been at $8.49 billion.
That is the third FTA involving the Philippines and South Korea, after the Korea-ASEAN FTA and the Regional Complete Financial Partnership.
Nevertheless, Jose “Sonny” A. Africa, govt director at suppose tank IBON Basis, stated the anticipated improve in exports of those agricultural merchandise is unlikely to considerably enhance the financial system, saying that the federal government is healthier off adopting an industrial coverage.
“The proposed FTA goes to be entered into exterior of an actual technique for nationwide industrialization and so might be a coverage step backward,” he stated in a Viber message. “These investments must be extra embedded within the native financial system to contribute to broader nationwide industrial growth.”
Federation of Free Farmers Nationwide Supervisor Raul Q. Montemayor stated the free commerce pact offers no assurance that Philippine farmers “will achieve a lot” in contrast with the Korean automakers that can have improved market entry to the Philippines.
“Our different concern is that many of the benefits, if any, go to massive multinationals who seize many of the professionalfits from exports,” he stated.
