MANILA, Philippines — Looking to secure a strategic foothold in Latin America while aggressively expanding its global market access, the government is exploring a new transpacific trade corridor. The Philippines has officially begun studying the feasibility of entering into a Free Trade Agreement (FTA) with Paraguay.
The preliminary evaluation follows a historic diplomatic breakthrough earlier this month, marking the first-ever state visit of a Paraguayan leader to Manila in the two nations’ 63-year diplomatic history.
The trade proposal was formally put on the table by Paraguayan President Santiago Peña Palacios during his bilateral talks with President Ferdinand Marcos Jr.
[Historic Presidential Bilateral Talks] ──► [Paraguay Proposes Transpacific FTA] ──► [DTI Trade Policy Team Review]
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[ PARAGUAY'S EXPORT OBJECTIVE ] [ PHILIPPINES' EXPORT OBJECTIVE ]
Unlock major Southeast Asian market access Establish a strategic logistical gateway
for premium livestock and agricultural goods. into the 300-million-consumer MERCOSUR bloc.
Trade Secretary Cristina Roque confirmed that the proposal has been handed over to the Department of Trade and Industry’s (DTI) specialized trade policy team, spearheaded by Trade Undersecretary and Chief Negotiator Allan Gepty, to mathematically project the net benefits for local sectors.
Despite Paraguay’s relatively small domestic population of 6.5 million people, local economic planners view the landlocked South American nation as a high-value economic partner. The core of the trade deal relies on a mutual exchange of regional strengths:
- Agricultural Inputs: The Philippines is highly keen on securing stable, lower-tariff access to Paraguay’s massive agricultural output—specifically soy and corn—to serve as a vital buffer for the domestic animal feed and livestock industries.
- The Livestock Push: Following early clearances issued in August 2025, Paraguay is aggressively looking to scale up its exports of beef, pork, and chicken to Filipino consumers.
- Marine Exports: Conversely, President Marcos Jr. explicitly raised the potential of utilizing the deal to aggressively push Philippine marine products into South America, focusing on high-demand local commodities like tuna, sardines, and milkfish.
[ PROSPECTIVE BILATERAL EXCHANGE ]
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[ PHILIPPINE EXPORTS ] [ PARAGUAY EXPORTS ]
• Tuna, Sardines, & Milkfish • Agricultural Soy & Corn (Animal Feed)
• Electronics & Digital Infrastructure • High-Volume Beef, Pork, & Poultry
• BPO Expansion (Targeting the Americas) • 100% Green Energy (₱3/kWh Locator Pitch)
Beyond merchandise trade, the Philippine Chamber of Commerce and Industry (PCCI) signed a business-matching agreement with Paraguay’s investment and export network, REDIEX. Local tech firms are already exploring setting up Information Technology-Business Process Management (IT-BPM) operations in Paraguay to capture the broader Americas market, lured by Paraguay’s pitch of 100-percent renewable electricity costs as low as ₱3 per kilowatt-hour and flexible corporate immigration quotas.
The exploratory talks with Paraguay are part of a broader, hyper-active trade liberalization campaign being executed by the Marcos administration to boost the global competitiveness of local Micro, Small, and Medium Enterprises (MSMEs).
During the sidelines of the Employers Confederation of the Philippines (ECOP) national conference, Secretary Roque revealed that the DTI is currently on track to finalize four massive trade pacts before the end of 2026:
| Target Region / Partner | Agreement Class | Core Strategic Focus / High-Volume Sector | Projected Timeline |
| European Union (EU) | Free Trade Agreement (FTA) | Broad market access; industrial, agricultural, and garments sectors. | Expected by mid-2026 (June/July) |
| Canada | Free Trade Agreement (FTA) | Marks the Philippines’ first-ever free trade agreement in North America. | Concluding late 2026 |
| Chile | Free Trade Agreement (FTA) | Comprehensive Economic Partnership Agreement (CEPA); first South American pact. | Final intersessional stages |
| India | Preferential Trade Agreement (PTA) | Focused tariff reduction specifically targeting affordable pharmaceutical imports. | Concluding late 2026 |
“We’re open to that because our President is pro-free trade agreement… The free trade agreements now are serving as a vital edge for us to compete directly against our aggressive ASEAN neighbors.” — DTI Secretary Cristina Roque
While total bilateral trade between the Philippines and Paraguay sat at a modest $2.2 million in 2025 (with Philippine outbound shipments accounting for $1.9 million), officials believe that formalizing a legal trade architecture will expand these volumes. By systematically removing tariff barriers, the administration aims to transform the modest baseline into a major commercial pipeline connecting Southeast Asian manufacturing with Latin American consumer markets.
