When Ferdinand Magellan’s Spanish expedition reached the Philippines in 1521 in search of the Spice Islands, his chronicler Antonio Pigafetta recorded the seafaring, navigation, and boat-building skills of the islands’ inhabitants. Magellan called the islands they encountered Las Islas de San Lazaro (Islands of Saint Lazarus), before Ruy López de Villalobos later gave the name Las Islas Filipinas in honor of Prince Philip, later King Philip II of Spain.
The islands officially became Spain’s colony in Asia in 1565, from which a sustained trans-Pacific commercial trade was established, linking Asia, the Americas, and Europe. This was the Manila Galleon Trade between Manila and Acapulco in Mexico, a forerunner of modern trade globalization.
The huge galleons, many of which were built in Philippine shipyards from the early 1600s onward, were the ocean liners of that era that crossed the vast expanse of the Pacific. They carried silver, goods, and people from Europe and the Americas to Manila, and Asian goods and Philippine sailors back to Acapulco.
That galleon trade lasted for 250 years, from 1565 to 1815. The Manila Galleon trade made Manila the international hub of trade in Asia. This history illustrates how the Philippines has long occupied an important position at the crossroads of interregional commerce.
Many developments changed the course of history between then and the 21st century.
On Sept. 22, 2026, the European Union (EU) and the Philippines announced that they had reached “substantial agreement” for a free trade agreement (FTA), which will liberalize over 94% of tariff lines, covering more than 97% of bilateral trade. The agreement is expected to deepen trade and investment ties, create new opportunities, and help both sides build more diversified and resilient supply chains.
This progress comes at a very important moment. For the Philippines and Europe, closer cooperation can provide the foundation for expanding opportunities for businesses, including micro, small and medium enterprises (MSMEs), manufacturers, and services providers, while giving consumers access to more choices.
Being like-minded partners, the Philippines and the EU share an interest in open, rules-based trade and deeper economic cooperation. The FTA can therefore become more than a trade instrument: it can form part of a partnership built on trust, predictability, and long-term investment.
Interestingly, that connectivity has taken new forms. The Philippines is increasingly integrated into ASEAN and Indo-Pacific supply chains, while its economic relationship with Europe is gaining greater momentum.
The timing of the FTA announcement was particularly notable as it coincided with the 12thASEAN-EU Business Summit in Manila, the annual flagship forum of the EU-ASEAN Business Council for high-level dialogue on trade, investment, and regional economic cooperation.
Department of Trade and Industry Undersecretary Ceferino Rodolfo, delivering the ASEAN Chair 2026 Address, underscored the importance of trust in strengthening partnerships. “Trust has become one of the world's most valuable strategic assets,” he said, linking it to investment, innovation, and long-term growth.
He also emphasized that the FTA matters not just for the Philippines and Europe, but for ASEAN: stronger links between an ASEAN member state and the EU can contribute to a stronger bridge between the two regions.
Business sentiment reinforces this opportunity. The 2026 EU-ASEAN Business Sentiment Survey found that 61% of European business leaders regard ASEAN as the region offering the strongest economic opportunities, while 78% expect trade and investment in ASEAN to increase over the next five years. At the same time, 73% said that there are many barriers to efficient supply chain use, with regulatory fragmentation remaining a significant challenge.
These findings point to both optimism and a clear agenda for action through reduced unnecessary friction, strengthened connectivity, and easier linkages for businesses to operate across borders.
The Philippines is already taking steps in this direction. Earlier, the EU and Spain officially joined the Luzon Economic Corridor (LEC) partnership, bringing the grouping to 13 partners. The EU is aligning its Global Gateway initiative with LEC priorities, including green and circular development, renewable energy, energy efficiency, secure digital connectivity, innovation, and skills development.
Launched by the Philippines, the United States and Japan in 2024, the LEC aims to connect Subic Bay, Clark, Metro Manila, and Batangas while accelerating strategic infrastructure investment and strengthening supply chains. European participation can bring additional capital, expertise, and technology while creating opportunities for Philippine firms and workers.
The Philippines has inherent strengths to build on. Its geostrategic location in the Indo-Pacific, abundant natural resources, and a large, young population provide a strong platform for investment.
According to the Philippine Statistics Authority’s 2024 Census of Population, the country recorded a population of 112.7 million, with a median age of 27.7 years and 66.7% of the household population classified as working age.
Turning this demographic advantage into sustained growth, however, will require continued investment in education, skills, infrastructure, and productive employment.
During the ASEAN-EU Business Summit, Department of Finance Undersecretary Ma. Angela Ignacio highlighted the Philippines’ resource base and its potential to play a greater role in ASEAN’s green metals and energy transition through responsible resource extraction and higher-value processing.
She also pointed to enacted reforms aimed at creating a more open and investment-friendly environment, including the new Public-Private Partnership Code, the CREATE MORE Act, and the green lanes for strategic investments.
These reforms can help attract more European and other foreign investors to the Philippines and support job-generating, investment-led growth. However, productive investment and greater market access alone will not guarantee results. This is where trade policy and domestic economic policy meet: an FTA can open doors, but businesses must be able to walk through them.
Competitive logistics, reliable energy, efficient ports, digital infrastructure, skilled workers, transparent regulations, and effective institutions will determine how fully Philippine enterprises can benefit from greater market access and investment flows.
The EU-Philippines FTA offers a promising foundation for that next chapter. Its successful conclusion and implementation will require sustained trust, continued reform, and close cooperation among governments and businesses.
Indeed, while the geography remains, the connections have expanded: from maritime trade routes to modern supply chains, digital networks, strategic investment partnerships, and knowledge and culture exchange.
Thus, the story that shaped the concept of globalization now shifts to a new page that interestingly redefines the meaning of connectivity and enduring collective partnerships amid some of the most important turning points in modern times.
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Venice Isabelle Rañosa is the Research Director of the Stratbase Group.