PHL GSP+ trade deal unaffected by EU aid rejection – DTI official

The trade incentives the Philippines enjoys with the European Union under the expanded Generalized Scheme of Preferences Plus or GSP+ are unaffected by the decision of President Rodrigo Duterte to no longer accept development aid from the bloc, Trade Secretary Ramon Lopez said on Thursday.

"It's not a grant. And they're commercial transactions that can mutually benefit both sides," Lopez told GMA News.

The GSP+ arrangement is currently under review. It requires the Philippines to ratify 27 international conventions which pertain to human and labor rights, environmental protection and good governance.

The GSP+ paved the way for the Philippines to export products to EU-member countries with zero tariff.

According to the Department of Trade and Industry, the GSP+ arrangement with the EU covers more than 6,000 products to be exported to the European bloc duty-free.

"The EU should continue to engage the country. GSP provides market access to our exporters, but it allows cheaper Philippine products for EU consumers or cheaper inputs for their manufacturers," Lopez said.

"EU investors in the country that exports back to EU also benefit from the GSP. It's a mutually beneficial arrangement," he added.

Latest data from the Philippine Statistics Authority showed export receipts from EU buyers totaled $2.401 billion in the first quarter of the year, up 48.3 percent from $1.619 billion a year earlier, making the EU the second largest market for Philippine exports among other economic blocs.

In March alone, Philippine shipments to the EU accounted for more than 16 percent of total exports.

"Exports to European Union member countries, with 16.2 percent share to total merchandise exports, amounted to $901.24 million. It went up by 56.2 percent from $577.04 million recorded in March 2016," according to the PSA. — VDS, GMA News