Philippines, EU agree on free-trade deal after 10-year push

CEBU, Philippines — The European Union and the Philippines reached a substantial agreement on a free-trade deal, clearing a major hurdle toward an accord that could deepen investment, broaden market access and strengthen supply chains between the two economies.

The agreement, announced Tuesday following a video call between EU Trade Commissioner Maroš Šefcovic and Philippine Trade Secretary Ma. Cristina Aldeguer-Roque, puts the negotiations on track for formal completion in the coming months.

The deal would liberalize more than 94 percent of tariff lines, covering more than 97 percent of bilateral trade, according to the European Commission. It would also open the Philippine government procurement market to foreign bidders, strengthen intellectual-property protection and establish rules for digital trade, including data privacy and consumer protection.

The pact comes as both sides seek to diversify trading relationships and reduce vulnerabilities in global supply chains amid heightened geopolitical and economic uncertainty.

EU-Philippine trade in goods reached €17.6 billion in 2025, while trade in services totaled €10.3 billion in 2024, according to the European Commission.

The EU was the Philippines’ fourth-largest trading partner in goods last year, accounting for 8.3 percent of the country’s total trade. EU foreign direct investment in the Philippines stood at €15.4 billion in 2024.

For Philippine exporters, the agreement would improve access to the EU market, while European companies would gain broader opportunities in the Philippines in areas including machinery, transport equipment, pharmaceuticals, agrifood, digital services and investment.

The agreement also includes provisions on energy and raw materials aimed at facilitating sustainable investment, particularly in renewable energy, as well as commitments on human rights, the Paris Agreement and sustainable development.

European Commission President Ursula von der Leyen said the agreement should generate more trade, investment and jobs while supporting the clean and digital transitions.

Von der Leyen also linked the deal to the broader EU-ASEAN relationship, saying the agreement sends an important signal ahead of the 50th anniversary of EU-ASEAN relations next year. She said she looks forward to returning to the Philippines in 2027 to sign the agreement.

The Philippines and EU first launched FTA negotiations in 2015 before talks were suspended. They resumed negotiations in March 2024, with six rounds held through May 2026.

The latest agreement is a political conclusion rather than the final legal text. Negotiators will now settle technical details and implementation provisions before the pact proceeds to the formal signing and ratification stages.

The two sides said the accord is intended to provide businesses, including small and medium-sized enterprises, with more predictable trading conditions while making bilateral supply chains more resilient.