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The Philippines-China Free Trade Agreement (PCFTA) was signed in 2006 and took
effect in 2010. This agreement aims to promote trade and investment flows between the two
countries by reducing tariffs and other trade barriers. The PCFTA covers a wide range of goods,
including agricultural products, industrial goods, and textiles, among others. It also includes
provisions for cooperation in areas such as customs procedures, intellectual property, and e-
commerce.
China, The Philippines’ partner for growth. These agreements represent the steady
growth of bilateral trade between the Philippines and China. Today, China is one of the country’s
major trading partners with an export value of US$944.23 million in August 2019. In addition, it
also brings in the most value of imported goods into the country with a 23.1 percent share of
total imports in August 2019. China is also one of the country’s top investors with investments
reaching US$980 million in 2018. With China’s Belt and Road Initiative (BRI) and the
Philippines’ Build, Build, Build program, the two countries have an aligned infrastructure
development agenda, which could lead to greater opportunities for cooperation and
collaboration. China and the Philippines have signed hundreds of bilateral agreements in several
cooperation areas, such as defense, tourism, agriculture, finance, and trade. The BIT and the
DTA treaty, in particular, aim to facilitate investment and business exchanges between the two
countries. The 1992 China-Philippines BIT ensures that investors from both contractual nations
would have their investments in the other contracting country protected. This is codified in the
most-favorable-nation (MFN) provision, which also guarantees that investors from the other
contracting country receive the same treatment as investors from each party’s own country and
investments from a third country. Both sides agreed to further increase trade between the two
countries, to return and even surpass the pre-pandemic bilateral trade volume. The two leaders
highlighted the importance of promoting more balanced trade between the two countries by
facilitating greater market access for Philippine exports into China.
Furthermore, In June 2021, Philippine President Rodrigo Duterte expressed his desire to
expedite negotiations on a bilateral FTA with China. The two countries have been exploring the
possibility of an FTA since 2004, but progress has been slow due to various issues, including
territorial disputes in the South China Sea. In August 2021, the Philippines' Department of Trade
and Industry (DTI) announced that it had formed a technical working group to conduct a
feasibility study on the proposed FTA. According to the DTI, the study would assess the
potential benefits and costs of an FTA with China, as well as the possible impact on different
sectors of the Philippine economy. However, there has been some opposition to the idea of an
FTA with China, particularly from Filipino workers and labor groups who fear that it could lead
to the influx of cheaper Chinese products and the displacement of local industries.
In conclusion, the Philippine-China Free Trade Agreement (PCFTA) is a bilateral
agreement between the Philippines and China. The PCFTA aims to promote trade and
investment between the two countries, and has been generally positively received. However,
some concerns have been raised about the potential negative impacts of the agreement on
workers and the environment.
Sources
https://scholar.google.com/scholar?hl=en&as_sdt=0%2C5&q=Philippines-
China+Free+Trade+Agreement+&btnG=
https://www.aseanbriefing.com/news/philippines-and-china-sign-six-agreements/