Trade Policy in the Philippines: Treading a Cautious Path

The Philippines has been an active supporter of the WTO and the interests of the developing countries while it is fully committed to the realization of an ASEAN economic integration. Since the mid-1980s it has undertaken major trade reforms to liberalize its trading sector and open up its economy except for sensitive areas such as agriculture and selected manufactures. The Philippines is also a keen supporter of AFTA and has fulfilled its tariff reduction commitments in time, with few exceptions. Although bilateral FTAs outside of AFTA have initially been a cause of concern, there is now a growing realization by the Philippine Government that these extra-ASEAN trade deals are practical strategies to pursue given the increasing competition in the international market. The policy-making process has been slow and cautious due to the populist nature of the Philippine Government and the adoption of an inter-agency approach to decision-making. The prospect for greater trade liberalization highly depends on whether the Philippines can overcome the current challenges facing its economy.