The Philippines has agreed to open its government procurement market to foreign bidders for the first time under a landmark free trade agreement (FTA) with the European Union that will also eliminate tariffs on more than 94 percent of tariff lines covering over 97 percent of bilateral trade.
The key provisions were disclosed by the European Commission after Manila and Brussels announced the substantial conclusion of negotiations on the long-awaited trade pact, which is expected to deepen economic ties beyond current levels of pound 17.6 billion (?1.26 trillion) in goods trade in 2025 and pound 10.3 billion (?736.9 billion) in services trade in 2024.
‘Our FTA does not just remove barriers to trade and investment – it builds a modern, forward-looking partnership between the EU and the Philippines, one that will open new opportunities for our exporters and investors, strengthen our supply chains and deepen bilateral economic ties for years to come. All at a time when diversification and resilience matter more than ever,’ Maroš Šefcovic, EC Commissioner for Trade and Economic Security, said.
Among the most significant features of the agreement is a government procurement chapter that will establish clear rules for public contracts and give European firms access to the Philippine procurement market.
The move could create opportunities for EU companies supplying goods, services and technology for infrastructure, transport, energy, healthcare and digitalization projects funded by the government.
Government procurement refers to the purchase by state agencies of infrastructure, equipment, supplies and services.
In the Philippines, public contracts range from roads, bridges, railways, ports and airports to medical equipment, information technology systems, consulting services and energy projects.
The European Commission did not disclose which agencies, projects or contract thresholds will be covered by the FTA. However, the deal is expected to provide European suppliers greater access to government-funded projects under transparent and predictable bidding rules.
The agreement’s economic gains will also be driven by broad tariff liberalization and improved market access.
According to the Commission, more than 94 percent of tariff lines will be liberalized, covering over 97 percent of bilateral trade.
The Philippines’ market of 113 million people is expected to become more accessible to European exporters, while Filipino businesses will gain wider access to the EU’s nearly 450 million consumers.
European exports to the Philippines are currently dominated by machinery and appliances, transport equipment, medicines and medical devices. Major EU agricultural exports include pork, poultry, dairy products and spirits.
In 2025, the EU was the Philippines’ fourth largest trading partner, accounting for 8.3% of the country’s total trade in goods. Foreign direct investment from EU to the Philippines amounted to pound 15.4 billion (?1.10 trillion) . Philippine direct investments in EU, on the other hand, totaled pound 2.4 billion (?171.7 billion)
The FTA also provides stronger protection for intellectual property rights, including a commercially significant list of European geographical indications, which protect products associated with specific regions or production traditions.
Another major feature is a dedicated digital trade chapter that seeks to facilitate online commerce while ensuring data privacy and consumer protection.
Negotiators earlier reported substantial completion of the chapter, along with provisions covering intellectual property and final provisions.
To reduce compliance costs for businesses, the agreement will establish transparent rules on sanitary and phytosanitary measures and technical barriers to trade while maintaining high regulatory standards on food safety and product quality.
The pact also embeds sustainability commitments at the core of the trading relationship.
The Commission said respect for human rights and the Paris climate agreement will be treated as essential elements of the treaty, supported by an ambitious chapter on trade and sustainable development.
In addition, both sides agreed on provisions covering energy and raw materials designed to encourage sustainable investment and create a level playing field, particularly for renewable energy projects.
‘This major advancement with the Philippines is another mutually beneficial partnership that will strengthen our resilience and trade diversification. It is good news for European farmers. We have reached an agreement on tariff preferences on key EU export interests such as pigmeat, and secured protection for almost 200 of our Geographical Indicators. This shows our partners value our high quality and food safety standards,’ Christophe Hansen, EC Commissioner for Agriculture and Food, said.
The agreement still needs to undergo legal scrubbing, signing and ratification by the Philippine Congress and the European Parliament before it can enter into force.