PIDS Says PH Has Limited Gains From EU GSP+

The Philippine Institute for Development Studies (PIDS)  released a study titled “Analyzing the Diversity and Inclusivity of Philippine Exports to the EU Under the GSP+ (Generalized Scheme of Preferences Plus)” which showed that in areas of inclusivity and diversity of export schemes to the European Union (EU) are limited despite receiving incentives from the GSP+.

The study’s author, PIDS Trade Administrative Officer, Brynn Jonnson Julia discovered that in light of the PH being part of the GSP+ scheme, new areas of exports to the EU surfaced such as headgear, footwear, animal products, and animals. Established areas such as vegetable or animal fats, prepared food, mechanical appliances, and machinery remain the biggest beneficiaries of the GSP+ from 2016 – 2018.

The EU’s GSP+ authorizes the entry of 6,274 products, tax-free in exchange for a country’s agreement to follow international conventions on good governance, environmental protection, labor rights, and human rights.

For vegetable or animal fats, the Philippines serves as a source of coconut oil to the EU.

For prepared food items, EU-based Filipino migrants make up a big percentage of the consumers of these products in Europe.

For mechanical applicances and machinery, Julia mentions that these products are sub-manufactured in the Philippines and then integrated directly into EU value chains.

“Despite a favorable demand-side condition (opening of the EU market through the GSP+), a supply-side impediment (anti-developmental political economy of the Philippines) was likely to have been highly influential in the process,”  stated Julia.

Julia also said that the PH has entrenched participation in global value chains due to its dependence on investments coming from foreign and multinational firms.

Source: Philstar