PH, EU on ‘clear path’ to free trade agreement. How close is a deal, really?

Marian Hukom/Philippines

European Commission President Ursula von der Leyen declares that the EU and the Philippines have 'just agreed' on a free trade deal that could eventually make nearly all bilateral goods trade tariff-free, with signing targeted for 2027

MANILA, Philippines – A “substantial agreement,” a “clear path” toward conclusion, and from the European Commission president herself: “We just agreed on a EU-Philippines free trade deal!”

After years of negotiations, officials from the Philippines and European Union (EU) spoke on Tuesday, September 22, with resounding confidence that a long-awaited free trade agreement (FTA) between the two was within reach. 

But beneath the diplomatic jargon, is there actually an FTA already? Not quite.

Philippine Trade Secretary Cristina Roque and European Commissioner for Trade and Economic Security Maroš Šefčovič announced that both sides had reached a “substantial agreement” following a video call, with their joint statement describing the development as a “breakthrough” that puts the FTA on a “clear path towards its formal conclusion in the coming months.” 

Negotiating teams were instructed to finalize the agreement “as soon as possible.”

Meanwhile, European Commission President Ursula von der Leyen struck a more emphatic tone in a post on X after speaking with President Ferdinand Marcos Jr., declaring that the two sides had “just agreed” on a free trade deal. The Commission’s official readout of their September 21 call was more cautious, saying the Philippines and EU were “about to conclude talks” on an FTA. 

So what’s left to do? A separate European Commission press release states that the Philippines and EU still have to “now finalize the negotiations on the basis of the substantial agreement reached today, including determining its implementation and finalizing technical details.”

There is already a target for the next big milestone. European Commission President von der Leyen said she looks forward to returning to the Philippines in 2027 to sign the FTA.

What does this mean for Filipinos?

The European Commission said the deal would remove or cut tariffs on more than 94% of product categories, covering over 97% of the goods the Philippines and EU currently trade by value. It also covers services and investment, digital trade, intellectual property, food and product standards, sustainability, energy, and raw materials.

It would also establish rules allowing foreign bidders access to the Philippine government procurement market, which the EU described as opening that market to foreign bidders “for the first time ever.”

For Filipinos, the most immediate question is whether an FTA could make European products cheaper.

Potentially, yes. The EU says some of its major industrial exports to the Philippines include machinery and appliances, transport equipment, medicines and medical appliances, while agricultural exports include pork, poultry, dairy products and spirits. 

Cutting Philippine tariffs on these goods could reduce their landed cost and increase competition or consumer choice. But an FTA doesn’t automatically mean cheaper shelf prices. It is still unclear which individual products will get immediate tariff elimination and which may be phased in over several years.

How much trade is at stake?

The EU was the Philippines’ fourth-largest trading partner in 2025, accounting for 8.3% of total Philippine goods trade.

Bilateral merchandise trade reached €17.6 billion (P1.27 trillion)* in 2025, consisting of €9.5 billion (P684.3 billion) in EU imports from the Philippines and €8.1 billion (P583.4 billion) in EU exports to the country. Services trade reached another €10.3 billion (P741.9 billion) in 2024, while the stock of EU foreign direct investment in the Philippines stood at €15.4 billion (P1.11 trillion).

The negotiations themselves have been more than a decade in the making. Talks were launched in 2015, stalled after a second negotiating round in 2017, and revived in March 2024 after both sides conducted a technical stocktaking exercise. – Rappler.com

*€1 = P72.0305 based on the September 22, 2026 rate of the Bangko Sentral ng Pilipinas’ Daily Reference Exchange Rate Bulletin