The Philippines and South Korea have reached a Free Trade Agreement (FTA) that will start on December 31, 2024, allowing for lower tariffs on Philippine banana exports to South Korea. Currently, these bananas face a 30 percent import tariff, which will decrease by 6 percent starting on December 31, and then by another 6 percent on January 1, 2025. This process will continue each year until the tariff reaches zero in five years.
Trade Undersecretary Allan Gepty emphasized the importance of this agreement, saying it will greatly benefit the banana industry. Other products, such as processed pineapples, which currently have a 36 percent tariff, will also see gradual reductions under this deal.
The FTA covers over ₱170 million worth of Philippine agricultural products, allowing 11,164 products duty-free access. This represents about $3.18 billion, or 87.4 percent, of the total Philippine exports to South Korea. Besides lowering tariffs, the agreement will foster cooperation in areas like creative industries, innovation, and manufacturing.
The Board of Investments (BOI) estimates that this agreement could bring in ₱150 billion to ₱200 billion in foreign investments to the Philippines within the first three years.
Signed in September 2023 during the 43rd ASEAN Summit in Jakarta, Indonesia, the Philippine Senate ratified the agreement on September 23, 2024, and it was approved by the South Korean parliament in November.
In 2023, trade between the Philippines and South Korea reached $12.02 billion, with the Philippines exporting $3.53 billion worth of goods and importing $8.49 billion from South Korea.
Overall, the FTA is expected to strengthen trade ties between the two nations and offer significant advantages to important sectors of the Philippine economy.
Stay on top of supply chain news with The Supply Chain Report. Enhance your international trade knowledge with free tools from ADAMftd.com.
#PhilippinesSouthKoreaFTA #BananaExports #FreeTradeAgreement #PhilippineAgriculture #TariffReduction #PhilippineEconomy #SouthKoreaTrade #ProcessedPineapples #ForeignInvestments #ASEANSummit #PhilippineExports #TradePartnership
