The Philippines may be on the cusp of gaining access to a more lucrative market, as the country moves closer to joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). If successful, this could pave the way for lower tariffs and a bigger role in global supply chains.
The benefits of joining the CPTPP are far-reaching, with experts citing increased predictability in trading rules, more foreign direct investment, and deeper participation in regional and global value chains. A rules-based trading arrangement provides businesses with the confidence to invest, build long-term supply chains, and expand production, according to officials.
The CPTPP is a 12-country trade pact that includes Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the UK. The combined population of these countries is over 500 million, and their gross domestic product totals $13.5 trillion.
The agreement was a step closer to reality last week, as the parties to the CPTPP agreed to begin preparatory talks for accession of the Philippines, the United Arab Emirates (UAE), and Indonesia. The talks will advance engagement and understanding between the Philippines and the CPTPP parties on the agreement's standards, but do not guarantee accession or the launch of formal negotiations.
As the Philippines pursues entry into the trade bloc, it must implement domestic reforms to reduce trade barriers and meet the CPTPP's entry standards. This includes improving the ease of doing business, upgrading infrastructure, lowering logistics costs, supporting digitalization, and upskilling the local workforce.
The Philippines must also keep up with its regional neighbors in improving cross-border trade through agreements like the CPTPP. "As our ASEAN neighbors deepen their trade integration, the Philippines must remain competitive in attracting investments and expanding export opportunities," said a senior official.
Experts warn that without stronger competitiveness, the Philippines may see imports rise faster than exports, putting pressure on local industries, particularly agriculture and small and medium enterprises. However, Philippine membership in the CPTPP could encourage more British firms to invest and trade in the Philippines and across Southeast Asia.
The UK has expressed support for the Philippines' application, with officials citing the benefits of lower tariffs, simpler trading rules, and stronger supply chains. "We've strongly supported the Philippines' application. If the Philippines completes the process and joins the agreement, businesses in our countries would benefit from these advantages," said a British official.
