A FREE trade agreement (FTA) with South Korea is expected to generate foreign direct investment (FDI) mainly in electric vehicle components and the food industry, the Department of Trade and Industry said.
“FDI potential is between P150 billion to P200 billion in three years, particularly from the electric vehicle (EV) value chain and also in agricultural processing,” Trade Undersecretary Ceferino S. Rodolfo said on the sidelines of a Makati City event last week.
Mr. Rodolfo said the FTA signing with South Korea is targeted for November.
“We are done with the legal scrubbing. I will be going to Korea from Oct. 14 to 17 for a Joint Economic Cooperation session. But that also includes a meeting with my counterparts on the FTA to prepare for the signing,” Mr. Rodolfo said.
FTA negotiations between the Philippines and South Korea started in June 2019 and ended in October 2021.
Philippine products covered by the FTA include banana and pineapple. South Korean products that will enjoy free-trade privileges include vehicles and auto parts.
Under the FTA, Philippine banana exports to South Korea will be charged zero duty in five years while processed pineapple exports will be duty-free in seven years.
“For the Philippine banana exports, (the FTA) reduces the competitive disadvantage in terms of tariff compared to countries like Vietnam. That would be enough so that the investors in banana plantations here will not shift their plantations to Vietnam,” Mr. Rodolfo said.
“Another important thing in the Philippines-South Korea agreement would be the ecotechnology chapter where there are strong provisions on collaboration in green technology, including electric vehicles, health, and biologics,” he added. — Revin Mikhael D. Ochave