WORLD TRADE  
ORGANIZATION   
WT/TPR/M/261 
16 April 2012 
 (12-1983) 
Trade Policy Review Body 
20 and 22 March 2012  
 
 
 
TRADE POLICY REVIEW 
 
THE PHILLIPINES 
 
Record of the Meeting 
 
Chairperson:  H.E. Mr. Eduardo Muñoz Gómez (Colombia) 
 
 
  Page 
 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3 
II. OPENING STATEMENT BY THE REPRESENTATIVE OF THE PHILIPPINES  4 
III. STATEMENT BY THE DISCUSSANT 9 
IV. STATEMENTS BY MEMBERS 11 
V. REPLIES BY THE REPRESENTATIVE OF THE PHILIPPINES AND ADDITIONAL 
 COMMENTS  32 
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 37 
 
 
 
Note:   Advance written questions by WTO Member s and the replies provided by the Philippines are 
reproduced in document WT/TPR/M/261/Add.1 and will be available online at:  
http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm.    WT/TPR/M/261 
 Page 3 
 
 
  I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The fourth Trade Policy Review of the Philippines was held on 20 and 22 March 2012.  
The Chairperson H.E. Mr. Eduardo Muñoz Gómez (Colombia) welcomed the delegation of the 
Philippines headed by H.E. Mr Adrian Cristóbal,  Under-Secretary of the Department of Trade and 
Industry, and the discussant, Mr. Martin Glass (Hong Kong, China).   
2. The Chairperson recalled the purpose of the Trad e Policy Reviews and the main elements of 
the procedures for the meeting.  The report by the Philippines was contained in document 
WT/TPR/G/261 and that of the WTO Secretariat in WT/TPR/S/261. 
3. Questions by the following delegations had been  submitted in writing at least two weeks in 
advance and had been transmitted to the delega tion of the Philippines:  Hong Kong, China;  
Argentina;  Chinese Taipei;  Turkey;  Saudi Arabia;  Japan;  European Union;  India;  New Zealand;  
Australia;  Thailand;  Indonesia;  Chile;  a nd Mexico. The following de legations submitted written 
questions after the two-weeks deadline: Peru;  Co lombia;  Pakistan;  Korea;  United States;  
Singapore;  and Canada.     
4. The Chairperson noted that he had considered the reports prepared for this meeting by the 
Philippines and the Secretariat.  He was pleased to  note that compared to the economic difficulties 
many WTO Members had been going through for some time now, the Philippines' economy had 
grown at an annual average rate of 5% since 2005.  Nonetheless, the economy was operating below 
potential due to key constraints such as inadequate infrastructure and low investment.  He noted that it 
would be interesting to hear from the Filipino fri ends how they viewed the prospects for their 
economy and what reforms were being considered to address those constraints, improve productivity 
and compete with low-cost neighbouring countries. 
5. Overall, this Review provided an opportunity to exchange views on matters of interest to all 
Members.  In his view, these included: 
 • Measures have been taken to improve the business environment but there remains 
considerable scope for improvement.  Memb ers would like to know what actions are 
intended in this regard. 
 • The Philippines maintains its overall policy of ensuring that key sectors are controlled by 
Filipinos and remain restricted for foreign i nvestors.  As a result FDI inflows are low 
compared with other countries in the regi on.  Delegations would appreciate learning 
more about the authorities' approach to FDI. 
 • The Philippines tariff has been simplified a nd the simple MFN applied average tariff has 
decreased over the review period.  Ques tions may be asked on how to ensure 
predictability of a trade regime where some  40% of tariff lines are unbound and there is a 
considerable gap between applied and bound rates. 
 • Participation by foreigners in the governme nt procurement regime remains restricted and 
seems to depend upon the source of the funds for the projects and the domestic 
availability of the procured goods and servi ces.  Perhaps the Philippines might elaborate 
on whether it plans to use its public procurem ent framework to develop infrastructure in 
a cost-effective manner. 
 • How does the Philippines plan to tackle the various social and economic challenges 
facing the agricultural sector? WT/TPR/M/261 
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  II. OPENING STATEMENT BY THE REPRES ENTATIVE OF THE PHILIPPINES 
6. Being the first Member to use the alternative timelines, we find the process beneficial, for it 
allowed all parties involved in this exercise suffi cient time to communicate with one another in an 
intelligent manner. With this Review, we aim to  provide fellow WTO Members a picture of the 
Philippines' economy, the changes it is undergoing, its bright prospects as well as its challenges. 
There is a surge of confidence in the Philippines and with good reason. For many years, the Philippine 
economy was described as "resilient". Indeed, it was. For more than two decades, in spite of global 
economic crises, oil price shocks and countless natu ral disasters, Philippine GDP grew at an annual 
average rate of 4%. Steady, continuous, and respect able growth; but not quite the kind of growth the 
country needs – or its people deserve – to eradi cate poverty. Recurring obstacles, mainly in political 
legitimacy, governance, and financia l stability rendered rapid or high economic growth elusive, much 
less an equitable distribution of wealth. 
7. But, we see a very different picture now. Pa instaking policy reforms planted in the past, 
especially in the financial sector, not only helped  the economy survive powerful external shocks, but 
are now actually bearing fruit, putting the country in a more competitive position.  Critical initiatives 
in improving governance put in place are now invigorated by a political will imposed from a highly 
trusted and credible political leadership.  
8. In sum, many chronic problems that have pl agued the Philippine economy for a long time are 
now a thing of the past. And with a political l eadership spearheading the institutionalization and 
deepening of good governance, the Philippines foresees high and continuous ec onomic growth in the 
years to come. Reforms will continue to ensure th at wealth shall be shared more equitably while 
ensuring sustainable development. It is this picture of the Philippine economy that we shall try, within 
the time constraints, report to you today.  
9. During the period under review, the Philippine economy continued its steady growth from a 
real GDP growth of 4.8% in 2005 to 6.6% in 2007 and,  in spite of the global financial crisis, recorded 
a 7.6% growth in 2010 and 3.7% in  2011. Services was the main driver of growth - 5.1% on average 
in 2005-11 (and 2.8% at the height of the global ec onomic crisis). Industry followed closely with a 
4.8% average annual growth in the same period.  Agriculture, however, was hard hit by El Niño, 
La Niña and other natural calamities, and, t hus, experienced  only a 2.2% average growth. 
10. Crucial reforms were put in place to achieve su stained growth while managing inflation. We 
also imposed measures to make financial intermedia tion more efficient and fu rther develop the capital 
market to expand domestic resource mobilization. Infl ation has been consistently tempered at less 
than 5%, owing to the improvement in the Philippine s' credit outlook. This, in turn, further enhanced 
its attractiveness as a destination of foreign portfolio and direct investments.  
11. Industrial peace, a major indicator of effectiv e non-inflationary growth, has been achieved. 
Labor disputes and disruptions, formerly a recurring problem, are hardly noticeable today. From an 
all-time high of 581 actual strikes in 1986, only four strikes were declared in 2009 and two actual 
strikes in 2011. 
12. Trade plays a significant role in achieving economic growth. Export strategies include 
diversifying products as well as markets and fost ering innovation to move up the value chain. 
Providing access to business opportunities and financing for micro, small and medium enterprises is also a priority. Trade advocacy and education ca mpaigns about the WTO and free trade agreements 
are in full swing, resulting in double utilization of the latter.   
13. Since the last Review, our external trade has experienced positive growth.  Exports of goods 
and services grew at annual average of 5.3% from 2005-2011. Notable was the recovery of the  WT/TPR/M/261 
 Page 5 
 
 
  electronics industry, and the strong showing of cl othing and accessories, coconut oil, woodcrafts and 
furniture, and automotive parts and components.  The services sector – propelled by an innovative, 
educated and English-speaking workforce – remains robust. Our creative industries, business process 
outsourcing enterprises, and tourism and allied health services are moving up the value chain. On the import side, we have strong demand for mineral fuel s, electronic products, and industrial machinery. 
Since 2005, imports have grown on average by 2.7% annually. 
14. The Philippines projects economic growth this year  at 5 to 6%, but we are confident that we 
will achieve our target of sustained 7% to 8% pe r annum in the next several years. These growth 
prospects will result from the ongoing implementation of strategies for "inclusive growth" in the 
Philippine Development Plan 2011-2016.  A powe rful element behind this confidence was the 
election in 2010 of President Benigno S. Aquino III. Widespread public support for his platform of 
good governance and anti-corruption is the impetus for much-needed reforms to achieve economic 
growth with a more equitable distribution of wealth.  
15. The conclusion of a balanced Doha Round pursu ant to its development mandate, should also 
be able to facilitate the recovery of the globa l economy and present many countries, including the 
Philippines, broader opportunities towards higher growth and economic prosperity. 
16. Critical reform measures in the areas of g overnance, investment policy, monetary and 
financial sector, as well as fiscal policy were vigorous ly pursued. The current Government's improved 
record on good governance, prudent fiscal and bu dgetary management, a nd solid popular support 
from the Filipino people will deepen these reforms.   Good governance fuels our reform initiatives and 
inclusive growth strategy. 
17. Several years ago, the Philippines started im plementing a comprehensive transparency and 
regulatory reform program. Some of the achieveme nts include the Philippine Government Electronic 
Procurement System (PhilGEPS), the electronic porta l for all government procurement. This allows 
small and medium sized enterprises to participat e and secure government contracts. The Anti-Red 
Tape Act of 2007, which streamlines the bureaucrac y and institutionalizes public accountability, is 
another major milestone. 
18. Since President Aquino assumed office, the Government has embarked on several new 
initiatives to institute transparency , accountability and citizen participa tion in governance with the aid 
of information technology. As part of the multilate ral Open Government Partnership, the Philippine 
Government Action Plan is being implemented to  ensure transparent and accountable delivery of 
public services, curb bureaucratic and political corrup tion, strengthen the rule  of law, and enhance 
citizens' access to information and government participation. A full disclosure policy on budget 
information, including details on program and project  implementation, has been set up. In compliance 
with the Anti-Red Tape Act, 74% of government agen cies have issued citizen's  charters to simplify 
government procedures and facilitate transactions.  
19. Competition Policy, a necessary element in any sound governance program, has been one of 
the priority legislative bills of the Aquino Admi nistration pending in the Philippine Congress. In the 
meantime, the Office for Competition was created with Executive Order No. 45 to ensure that 
prohibitions and requirements of competition laws are adhered to and to monitor and implement 
measures to promote transparency and accountability in markets, among others. 
20. Judicial reforms have also been undertaken to facilitate trade and improve  predictability in the 
business environment. These include the creation of special Intellectual Property courts and rules, 
establishment of the alternative dispute resoluti on system, and the strengthening of commercial 
courts. WT/TPR/M/261 
Page 6  
 
  21. Our transparency and governance reforms ha ve yielded positive results. The Philippines 
improved its rankings in the Transparency Intern ational Corruption Perception Index (up 5 places), 
the World Economic Forum Competitiveness Rankings (up 10 places) and the Economic Freedom index (up 8 places). High Investor confidence has re turned in the stock market. Under the Aquino 
Administration, the index has risen more than 50%, setting a new record.  With the high trust ratings 
of the Aquino Administration, more reforms in governance and institutions are in the pipeline for 
implementation. 
22. The Government's policy is to attract, promot e, and welcome investments into the economy 
consistent with the Constitution and laws. Limi tations are found under the Foreign Investment 
Negative List (FINL), the latest of which was issued on February 2010. 
23. The Board of Investments has completed the 2 011 Investments Priorities Plan (IPP), and it 
took effect in July 2011. The 2011 IPP focuses on invest ment areas that are considered "enablers" or 
"triggers" that will provide opportunities to achieve  balanced and equitable economic development, 
contribute to modernization, foster transfer of t echnology, and encourage formation of durable capital. 
24. Towards this direction, a milestone during the Review period is the enactment of the 
Renewable Energy Act of 2008, opening up invest ment opportunities for the sector and improvement 
of the country's energy sufficienc y level through clean and sustaina ble sources.  Initiatives undertaken 
are aimed to maintain, if not improve, the Philip pines' ranking as the second largest geothermal 
producer in the world. The Philippines also wants to  further improve its capacity on the hydro, wind, 
solar, ocean and biomass power. 
25. Another significant development for the economy is the Philippine Supreme Court's decision 
in 2006 upholding the validity of the Philippine Mining Act and its implementing rules and 
regulations.  Being the fourth mineral rich country  in the world and following the encouraging trend 
in the world market, the Phili ppines foresees rapid growth in the mineral industry.  
26. Regarding financial standing, the Philippin es has exhibited a strong external payments 
position supported by large foreign exchange re serves, huge overseas foreign remittances, a net 
external creditor balance. We have experienced seven consecutive years of balance of payments 
surplus. Our remittances have tripled in one  decade, and our revenues from business process 
outsourcing continue to grow rapidly. 
27. The Philippine banking system continues to be  healthy and on sound footing, with steady 
asset growth, a growing deposit base, ample liquidity, sustained improvement in asset quality, and above standard solvency ratio. The moratorium on the establishment of banks was lifted by allowing 
new banks to be established, which paved the way for pioneering microfinance banking institutions.  
Performance standards and reporting requirements to  ensure sound and sustainable operations were 
also implemented. 
28. More poor people have gained access to credit as part of the Central Ba nks financial inclusion 
initiatives. The Philippines' "microfinance" program, one of the global pioneers, provides easy credit 
to marginalized sectors of the economy, particul arly the MSMEs and the agriculture sector. Women 
especially, who are most prone to economic disadva ntages and displacement, benefit immensely from 
microfinance.  This is made possible through colla teral-free loans with the development of credit 
surety funds (CSF), and an intensified Ec onomic and Financial Learning Program (EFLP). 
29. On fiscal policy, fiscal consolidation continues to be the Government's priority with particular 
focus on balancing the budget and improving tax a nd revenue efforts. Among the prudent fiscal 
management and administrative re forms implemented are: (a) the computerization and automation 
programs of the Bureau of Internal Revenue (B IR) aimed at further improving revenue collection  WT/TPR/M/261 
 Page 7 
 
 
  efficiency and minimize tax evasion; and (b) the electronic to mobile project of the Bureau of 
Customs (BOC) which is considered to be a step towards streamlining the core processes towards the 
realization of the National and ASEAN Single Windows.  The Philippines has also acceded to the 
Revised Kyoto Protocol (RKC) and is now in th e process of reviewing and amending our customs 
laws, rules, and regulations. 
30. The impact of the Government's prudent fiscal management and administrative measures, was 
reflected in a much better level of fiscal deficit ach ieved in 2011.  The country's budget shortfall last 
year at 2.0% of GDP, was lower than the 3.5% ratio in 2010.  Standard & Poor's has also lifted its outlook on the country's foreign- and local-currenc y bonds from Stable to Positive, citing the stronger 
external position, well-managed inflation expecta tions, and improved prosp ects of economic reform. 
Other international credit rating agencies upgraded their ratings for the Philippines in June 2011 - 
Moody's (from Ba3 to Ba2) and Fitch (from BB to BB). 
31. On our bilateral and regional trade relations, the Philippines ratified the Philippines-Japan 
Economic Partnership Agreement (PJEPA) on October 2008, our first bilateral free trade agreement. 
The Philippines also continues to liberalize trade w ith ASEAN Member States with the ratification of 
the ASEAN Trade in Goods Agreement (ATIGA) in  2009 and the subsequent reduction to zero of 
98.68% of Philippine tariffs.  Significant progr ess has been made in the ASEAN-China and the 
ASEAN-Korea Trade in Goods Agreements, having rea lized the elimination of tariffs classified under 
the Normal track. 
32. The Philippines has also ratified the ASEAN- Australia-New Zealand FTA, the ASEAN-Japan 
Comprehensive Partnership Agreement, and the A SEAN-India trade in Goods Agreements, and has 
implemented its commitments according to th e timelines agreed under these agreements. The 
Philippines is fully supportive of efforts to furthe r deepen economic integration in the region, and 
continues to be an active participant in discu ssions on the harmonizing the ASEAN Plus One FTAs 
into a possible Plus FTA configuration. 
33. Our regional trade and economic relationships reinforces our adherence and commitment to 
the spirit and letter of the WTO. We recognize its cruc ial role in fostering a more open, transparent, 
predictable, and competitive multilateral trading sy stem.  In this light, the Philippines has made 
substantial commitments and at the same time unde rtaken unilateral liberalization programs.   
34. The Philippines is one of the more progressive developing countries in terms of low applied 
tariffs.  As noted in the Secretariat report, our si mple average applied MFN rate is already at 6.4%, 
reduced from 7.4% since the last Review.  The "overhang" provides a degree of policy space for 
flexibility available for developing countries like the Philippines, a fundamental principle in the 
multilateral trading system. 
35. Our Trade Minister, at MC8, expressed our firm resolve to help the Organization to move 
forward with its agenda. The Philippines welcomes  discussion of "fresh ideas and approaches" to 
reinvigorate negotiations, including pragmatically a dvancing the negotiations where progress can be 
achieved.  However, we believe that:  any review sh ould be based on the progress achieved so far;  the 
Doha development mandate must always be an inte gral part of any of these negotiations;  and any 
early agreements shall be taken into account in "assessing the overall balance of the negotiations". 
The Philippines remains fully engaged in the DDA, and we join othe rs, including our ASEAN 
neighbours, in calling for decisive collective acti on backed by thorough examination of the options 
currently before us. 
36. I come to the conclusion of our opening statement. Six years ago, when the Philippines 
appeared before its fellow WTO members in this sa me process, we presented a country that managed 
to survive and recover somewhat from an intern ational financial crisis. The Philippine economy, WT/TPR/M/261 
Page 8  
 
  though not crippled, was neither a rising star in the most dynamic region in the world. Our economic 
growth, though continuous, was not the weapon to wage a war on poverty. "Resilient" was the 
adjective to describe our economy. 
37. Now, in this review, we show a different picture. Still resilient in the sense of surviving 
another global financial crisis, but on a very differe nt footing. Many of the chronic obstacles that have 
held back the economy from sustained and rapid gr owth - political legitimacy, governance, financial 
health, competitiveness – have been hurdled. We instituted painstaking reforms and imposed hard 
disciplines. They came at a price - higher taxes, be lt-tightening measures, job displacements, families 
separated for a decent wage elsewhere. 
38. With a trusted, credible and committed politi cal leadership, the reforms in governance and 
institutions well underway will further deepen. The sacr ifices of a generation will not go to waste, and 
will bear fruit now and in the near future. The Ph ilippine economy is poised for sustained and rapid 
inclusive growth.  WT/TPR/M/261 
 Page 9 
 
 
  III. STATEMENT BY THE DISCUSSANT (MR. MARTIN GLASS (HONG KONG, 
CHINA)) 
39. I would also like to preface my remarks by congratulating and comp limenting the Philippines 
for being the first delegation to implement the alte rnative timeline for Trade Policy Reviews that was 
agreed as a result of our review of the TPRM last y ear.  This alternative should have the effect of 
making proceedings more comprehensive, meaningf ul and interactive.  While I acknowledge that 
adhering to such an advanced timetable means extra effort for all concerned, I hope that we can see 
the exercise bear fruit over these two days - and that this will win over those who have earlier professed a preference for the status quo .   
40. Turning to specific points in the Reports, a ra ther mixed picture emerges.  The economy of 
the Philippines has undoubtedly performed well over the period under review, with average annual 
real GDP growth around 5%, even allowing for the fi nancial crisis and econo mic downturn that have 
beset us for most of the review period.  At the same time, the Government has pioneered reforms to 
improve the business environment and facilitate trade, and launched new initiatives to support 
investment, to cut red tape and to tackle corrupti on.  On the other side of the coin, with around a 
quarter of the population living on less than a dollar a day, the Philippines, like many other 
developing countries, faces the challenge of lifting li ving standards while at the same time needing to 
service high levels of public debt. 
41. Under these circumstances, it would be interes ting to know what reforms the Government has 
under consideration to increase its economic growth, to  raise the living standards of its people and to 
respond to competitive pressures, particularly those aris ing from within the region.  In this connection, 
restrictions on foreign direct investment are an area of concern, as pointed out, for example, in 
paragraphs 5 and 16 of the Secret ariat's Report, leading to an ec onomy that operates below its full 
potential, partly because of its policy to ensure  that key sectors of the economy are effectively 
controlled by Philippines nationals.  Another area of concern is the fact that the economy is reliant on 
inward remittances to the tune of around 10% of GD P.  In the longer term, of course, this has both 
heavy economic and societal costs, and the underlyi ng reasons for this situation will need careful 
scrutiny and the development of policies aimed at rectification. 
42. Against this general background, I would like to highlight four specific areas for further 
discussion.  Firstly, the Philippines approach to FDI, which is rather restrictive, particularly, but not 
confined to, major sectors of the economy, such as telecommunications, financial and professional 
services, transportation, fisheries and agriculture.  Because of the importance of these sectors, the 
efficiency (or lack of it) at which they perform, has a major impact on the performance of the rest of 
the economy.  Particularly telling in this respect is  paragraph 18 of the Secretariat Report, which is 
worth quoting in full:  "In spite of the Government's  concern about the Philippines sub-optional record 
of attracting investment, compared with other ASE AN countries, and its determination to change this 
situation, there remain extensive constitutional and statutory limitations on foreign investment.  This 
largely reflects the situation prevalent at the time of the last Review of the Philippines despite at that 
time the urging of many Members for relaxation of such  barriers.  The authorities confirmed that there 
have been no concrete initiatives to relax or remove any of these restrictions." 
43. While I can appreciate the political sensitivities unde rlying the apparent lack of Government 
action in this respect, it nevertheless remains th e case that such restrictions impose a brake on 
economic development, and it would be worthwhile to  reflect again on the value of liberalising – to 
some extent at least – the environment for FDI. 
44. Secondly, as the Secretariat Report points out, poor infrastructure accounts for a good deal of 
the Philippines' economic weakness, affecting as it do es both trade in goods and tourism.  Given the 
natural beauty of the archipelago, its historical her itage and its warm climate, it is not surprising that WT/TPR/M/261 
Page 10  
 
  the Government sees tourism as being central to th e Philippines' social and economic development.  
But there is a clear case of underperformance. In 2010, only 3.5 million tourism arrivals were 
registered, but the Philippines boasts wonderful beaches - Boracay in a recent global survey was voted 
the best beach destination in As ia, - as well as the undeniable in land attractions of Baguio and the 
Banaue Rice Terraces in the Cordillera region to the north, the cool charms of Tagaytay and the Taal 
Volcano and the historic monuments of Intramur os. By way of comparison, Thailand welcomed 
16 million visitors  in 2010. It is obvious that travel  and transport issues play a part in suppressing the 
islands' natural potential.   
45. To address such infrastructural needs, a public-p rivate partnership initiative has recently been 
rolled out, a very welcome move, and while this is still in its early stages, it would nevertheless be 
interesting to hear of progress in this respect, and also whether any initiatives to  liberalise air services 
are, literally, in the air.  As the Secretariat re port points out, participation by non-nationals in 
government procurement is restricted, and questio ns arise as to whether a more open government 
procurement regime could be used as a cost-effective tool to develop the country's infrastructure?  In 
this respect, I am sure that any application by th e Philippines to join the newly-minted Government 
Procurement Agreement would be welcomed by the existing signatories. 
46. My third point concerns fiscal reform:  the Philippines is in a fiscally-vulnerable position, 
public debt is high and government revenues re main overly reliant on customs duties, which 
accounted for nearly 24% of total tax revenue in  2010.  I expect these to come under increased 
pressure as various FTA duty reducti ons are implemented.  At the same time, one of the most 
productive sectors of the economy – manufacturing within free trade zones – is not taxed.  Again, 
while such breaks have short-term appeal, experi ence has shown them to be economically distortive 
and, in the longer term, when they run out, as th ey inevitably must, business will simply decamp to 
another jurisdiction that is prepared to offer them a better deal.  Better therefore to level the playing 
field and introduce equitable taxation for all fo rms of productive economic activity.  As the 
Secretariat reports, there is a bill under considerati on in Congress aimed at rationalising the system of 
tax incentives, and it would therefore be interesting to learn of any latest progress in this regard. 
47. My fourth and final point is on the social and economic challenges of agricultural reform.  On 
the one hand, the Philippines is involved in an ag rarian land redistribution under the comprehensive 
Agrarian Reform Programme which has given rise to farm smallholdings and as a result a largely 
inefficient agriculture sector, employing around one thir d of the population.  At the same time we can 
see that this sector is starting to come under pressu re due to liberalisation measures contained in 
various FTAs.  Sugar is particularly vulnerable, as  it is currently highly protected but faces imminent 
tariff reductions within ASEAN.  In the face of such competitive pressures, rather than focusing on 
ways to increase the productivity and efficiency of its  farming sector, the Government appears to have 
responded by imposing local content requirements.  As regards rice, which accounted for nearly a 
quarter of total agricultural production in 2010,  the Philippines faces two immediate challenges: 
firstly the expiry in June 2012 of its ability to ma intain an import quota under the special treatment 
clause of the Agreement on Agriculture; and, secondly, the reform of the high-cost price support mechanism operated by the National Food Authority,  which has seen it incur debts of PHP 177 billion 
up to 2010. 
48. In conclusion, therefore, while I note th e overall positive performance of the Philippines 
economy over the period in question, due largely to improved governance and fiscal policies, there are 
a number of areas in which further improvements can be made, of which some are easy and some not 
so easy.  In other words the Philippines is on track , but its economic development remains a work in 
progress.    WT/TPR/M/261 
 Page 11 
 
 
  IV. STATEMENTS BY MEMBERS 
ARGENTINA 
 
49. Economic and trade relations between Arge ntina and the Philippines are increasingly 
important.  Both exports and imports grew by more than 30% in 2011, and the value of trade reached 
some US$670 million.  In August 2011, the Forei gn Ministers of Argentina and the Philippines 
proposed the establishment of an economic consu ltation mechanism to explore new investment 
possibilities and to boost bilateral trade, and concluded a technica l cooperation agreement that will 
serve as a framework to strengthen South-South and triangular cooperation. 
50. The Philippines has made significant progress.  Ac cording to the Report by the Secretariat, 
during 2005-2011 the Philippines had an annual real GDP  growth rate of 5%, moderate inflation, and 
a surplus in its external account.  Growth was help ed by the fiscal stimulus packages implemented in 
2008 and 2011 in response to th e global economic crisis.  At the same time, the Philippines 
emphasized micro-financing, promoted investment through a strategy of regrouping the geographical 
regions of the country into "Super Regions", a nd optimized the Governme nt's efforts in rural 
development by synchronizing resources and stream lining the policies, programmes and projects of 
the agencies concerned. 
51. However, unemployment and underemployment ra tes remain high, and growth has been 
undermined, among other things, by low investment and slow technological progress resulting from inadequate infrastructure.  The Philippines Development Plan 2011-2016 will serve as the 
Government's road map in the formulation of  policies and implemen tation of development 
programmes to help overcome these problems. 
52. On the trade front, progress has been made in  streamlining customs payment and clearance 
processes and in creating a single window.  The tari ff was also simplified with the adoption of the 
ASEAN Harmonized Tariff Nomenclature. 
SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU 
53. The Philippines' economy has performed well during the period under Review, despite the 
adverse effects of the recent global economic crisis , plus the typhoons in 2009 and the drought of 
2010.  We are pleased to see that the Philippines' r eal GDP grew at an annual average rate of 5%, 
reaching 7.6% in 2010, its highest annual growth  rate since 1976.  We also commend the Philippines 
on the efforts made over the last few years to pr omote and facilitate trade, such as by introducing 
automated customs procedures, applying tariffs at one-quarter of their bound levels, increasing the 
number of national standards that correspond to international standards, and so on. 
54. However, at the same time, and as the Secretariat's Report suggests, the slow pace of reform 
and some key constraints have proba bly prevented its economy from achieving its full potential.  In 
this regard, we would encourage the Philippines to ta ke steps to make infrastructure improvements, to 
promote more competition, further diversify its  economy, and eliminate limitations on foreign 
investment.  In particular, restrictions still remain on foreign participation in government 
procurement, and we conti nue to look forward especially to furthe r liberalization and simplification of 
the government procurement regime.  We would al so like to see the Philippi nes become a signatory, 
or at the very least an observer, to the Plurilate ral Government Procurement Agreement in the not-too-
distant future. 
55. Foreign direct investment can be a key driver  of economic growth.  The Philippines' FDI 
inflows are low compared with other countries in the region.  There would seem to be room for WT/TPR/M/261 
Page 12  
 
  improvement in the investment environment, as we ll as for the further liberalization of services, 
especially in the banking sector. 
56. The Philippines has long been a valued trade and investment partner of ours, and our 
economic relationship had broade ned and deepened over the years.  The Philippines is our 14
th largest 
trading partner, with the value of two-way trade re aching a total of US$9.3 billion in 2011.  And, we 
are one of the Philippines' top 10 trading partners in terms of both imports and exports.  A standing 
ministerial level conference between the two of us has also been established, hopefully paving the 
way for greater bilateral economic cooperation in the future. 
HONG KONG, CHINA 
57. The close relationship between the Philippines and HKC needs no lengthy elaboration.  The 
fact that my city has a strong Filipino community of more than 140,000, second largest in terms of 
expatriate groups, speaks eloquently to  that.  In terms of trade, HKC is the Philippines' sixth largest 
trading partner.  Bilateral trade between the two places grew by 8% last year.  We also work closely in 
APEC to promote trade liberalization.  We look fo rward to the further strengthening of our bilateral 
trade relationship in the years to come. 
58. Turning to some specific aspects of its trade policy, it is notable that the Philippines has 
maintained all its tariff lines at ad valorem  rate.  We welcome the Philippines' recent initiative of 
reducing its MFN applied rate from 7% in 2004 to 5.8% for non-agricultural products last year.  
Nevertheless, there is a gap of around 17% between the average MFN applied rate and the average 
bound rate for non-agricultural products.  The ga p between the bound and the applied rates – around 
42% - is even more apparent for the agricultura l sector.  HKC would encourage the Philippines to 
narrow these gaps in order to provide greater predicta bility for traders.  We also note from the replies 
of the Philippines its assurance that it remains fully engaged in  the negotiations for further 
commitments on its binding levels a nd coverage in the Doha Round. 
59. In terms of services, we see great potential in the services sectors of  the Philippines as the 
country gradually opens up its mark et and develops various services industries.  In this respect, we 
welcome the Philippines ratification of the Fourth and Fifth Protocol to the GATS in 2011 so as to 
bring its enhanced commitments on basic telecommuni cations and financial services into legal effect.  
That said, as the discussant and the Secretariat have  pointed out, the Philippines maintains an overall 
policy of ensuring that key sectors are effectively cont rolled by its nationals and remain restricted for 
foreign investors.  These include several important services sectors such as banking services and telecommunications, maritime transport services, and tourism.  Likewise, participation by foreigners 
in the government procurement regime remains restricted. 
60. HKC thanks the Philippines for its replies to our  questions in these areas.  We have studied 
them carefully.  We are encouraged by the assuran ce that the lifting of the moratorium on the opening 
of new commercial banks is curren tly being considered.  We woul d appreciate it if the Philippines 
could let us know the expected time of completion of its consideration in this respect.  We have also 
asked how many Certificates of Public Conve nience and Necessity in the telecommunications 
services sector were granted and to what extent fore ign participation was involved.  The reply from 
the Philippines to this question has not yet provided  the relevant data.  We hope the Philippines could 
follow up by offering further detail. 
61. Turning to trade facilitation, we are glad to note from the Government Report that the 
Philippines aims to reform and strengthen govern ment institutions, in order to make them more 
efficient and effective providers of public goods an d services, which is not only conducive but also 
essential to attracting trade and investment.  HKC thus commends the efforts of the Philippines on 
trade facilitation in the Review period.  Th ese initiatives include the automation of customs  WT/TPR/M/261 
 Page 13 
 
 
  procedures through the Electronic-to-Mobile system to streamline the payment and clearance process.  
A "national single window" is also being finalised.  Moreover, the Philippines is harmonising many of 
its domestic standards with international and regi onal ones.  That said, its import licensing system 
remains complex, as the Secretariat's Report has pointed out, and there is certainly some room to simplify it.  In any event, my delegation encourag es the Philippines to continue its trade facilitation 
efforts which will bring concrete benefits to the trade in terms of time and cost savings. 
TURKEY 
62. The level of trade between Turkey and the Ph ilippines is moderate, with a volume of over 
US$200 million.  With the aim to improve our bila teral relations, several agreements have been 
concluded in various fields including economic c ooperation, investments, double taxation, tourism, 
and civil aviation.  However, we are still at the stage of exploring practical ways to benefit from 
untapped potential between the two countries.  The r ecent visit to Turkey the Philippines's Minister of 
Industry and Trade Gregory Domingo in 2011 will give a boost to our efforts.  Following this visit, 
we organised a business mission to the Philippines for th e first time in 2011.  We  hope to keep this 
momentum in the coming years. 
63. The Philippines economy achieved stable growth in  the review period averaging 5% annually.  
Nevertheless, the Secretariat and Government Reports also mentions  domestic structural challenges 
the Philippines has confronted.  While the Philippin es has raised its standing in WEF ranking by ten 
places since the last Review, the World's Bank Doin g Business Index highlights the need for further 
steps to improve business environment.  We are pl eased to learn that this is recognized by the 
Philippines as a priority in the economic program. 
64. We support the Philippines's assessment that furt her liberalisation of trade and investment 
regime is one of the elements to address probl ems facing the economy.  Clearly, the international 
trade may contribute to the Philippines's efforts to fu rther increase sits productivity in one of the most 
competitive regions of the world. 
65. The Philippines has an open economy as the intern ational trade reaches to 70% of its GDP.  
In fact, compared to many other developing economies, the Philippines' tariff protection is lower and 
ad valorem  based.  We underscore the unilateral initia tive by the Philippines to further reduce its 
average simple tariff from 7.4% in 2004 to 6.4% in 2012.  In fact, the liberalization of several services 
sectors cited at the previous Review seems to be  paying well since the Philippines has become a net 
exporter of services since 2006, recording surpluses in this area. 
66. In this respect, we very much welcome the Phili ppines' ratification of the Fourth Protocol to 
the GATS in 2006 and the Fifth Protocol to the GA TS in 2011.  We hope these steps will be further 
strengthened with further commitments in other GATS areas as part of the DDA negotiations.  Manufacturing may easily follow the suit if certain further steps are taken to liberalize the trade 
regime. 
67. In terms of trade of goods, the use of auto mated customs processing and the initiative to 
establish a single window for custom procedures are also  important steps to further facilitate trade.  
As another step to ease trade flows, the Philippine s also managed to increase their alignment of 
national standards with the international ones to 78%.   However, there seems to be scope for further 
actions in this area.  Further simplification of the trade regime, including review of the import 
licensing requirements will only help the Philippines to better integrate with the booming industries in 
Asia.  This can only enhance their growth prospects to a large extent. 
68. The Philippines is an active WTO Member, and its contribution to the DDA is well known, 
particularly in agriculture.  In agriculture, we sh are their objective of improving the livelihood of rural WT/TPR/M/261 
Page 14  
 
  people.  For this purpose, we work closely with them  in various fora of this Organisation.  We very 
much value this partnership and, hope to continue  working together with the aim to promote further 
the interests of farming community in both countries.  
KINGDOM OF SAUDI ARABIA 
69. The Kingdom of Saudi Arabia is pleased to take part in this Trade Policy Review. It provides 
us with an excellent opportunity to look back at  the achievements of Philippines since its third TPR 
in 2005, and take stock on the implementation of  its multilateral commitments and progress in its 
economic and trade policy developments.  The Ki ngdom of Saudi Arabia and the Philippines are 
linked by broad and growing bilate ral relations. The economic relations  between our two countries are 
in excellent conditions and have been reinforced pa rticularly in the recent years with increased mutual 
visits of delegations and businessmen. The trade exchange between our two countries continues to 
grow steadily. Furthermore, Saudi Arabia is a si gnificant market in deploying workers and a major 
source of Overseas Filipino Workers (OFWs) rem ittances that has been helping the Philippines 
economy. 
70. The Kingdom of Saudi Arabia appreciates the re form efforts made by the Government of 
Philippines, particularly concerning trade liberaliza tion, fiscal consolidation and privatization, and 
values the measures that have been taken over the review period to improve the business environment. 
These efforts are surely to be recognized, but there is a considerable scope for improvement, and our 
ongoing review also allows for comments in some areas where we think improvements could be 
made, thus I would like now to draw a ttention to some particular issues.  
71. Although the Philippines has made tremendous e fforts in fulfilling its commitments to the 
WTO, the standards used in the control procedur es are varying, uneven, and do not comply in many 
cases with the WTO rules. Lack of  sufficient information on the Phili ppines' applied customs tariffs, 
as well as the absence of clear information on th e required documentation to benefit from some tax 
exemptions. 
72. The Government of the Philippines applies duties on oil products imports. Though the 
Government reduced the customs tariffs, it has b een maintaining duties on sales of oil products. The 
Philippines Customs Code includes an additiona l tax on all imported goods , which represents an 
"ad valorem  to the uniform prices that is equal to 10% of the total cost". Finally, the domestic laws 
and regulations regarding foreign investment are designed and implemented to ensure that key sectors 
remain restricted for foreign investors. For exampl e, foreign investors are not allowed to own lands.  
73. Having said that, we note with appreciation that , within the framework of its Trade Policy 
Review, the Philippines has reasserted its support to the WTO as an institution, and for the DDA 
negotiations.  We value the participation of the Ph ilippines in the regular activities of the WTO and in 
the DDA negotiations. We are confident that the Phili ppines will continue to develop, implement, and 
advocate open forward-looking trade policies and practices. 
JAPAN 
74. Japan would like to commend the Philippines for choosing new timelines for this TPR and for 
delivering most of its replies prior to the m eeting. This, without a doubt, serves for better 
understanding of the Philippines' trade policy by members. We look forward to having additional 
replies to the remaining questions. Besides such cont ribution to this meeting, it is a great pleasure for 
us to have the opportunity to comment on the Trad e Policy of the Philippines. The Japan-Philippines 
EPA, which we understand is the firs t bilateral FTA for the Philippin es, have further deepened our 
economic relationship in every aspect.   WT/TPR/M/261 
 Page 15 
 
 
  75. Today, I wish to make comments on investment  policy, trade and trade-related policy, and 
sectoral policies. Let me start with the Philippines' investment policies. Given a variety of investment 
incentives, it is apparent that the Philippines a ttaches great importance to investment policies. 
Nevertheless, we cannot ignore the fact that its  investment policy is severely constrained by 
constitutional and statutory restric tions on foreign investment. The Philippines maintains an extensive 
Foreign Investment Negative List, which covers essential services such as financial and 
telecommunication services. Sector-specific foreign investment restriction has been reported in such 
sectors not mentioned in the Negative List, as constr uction. We have a significant concern about the 
foreign capital limitations in these service sectors.  
76. Under the Philippines Development Plan 2011-16 , the Philippines set a target of annual 
average real GDP growth of 7-8%. In order to achie ve this target, it would be advisable to receive 
more foreign direct investment. In this regard, it is encouraging that the Philippines replied in its 
written answers that it is undertaking a review of ex isting laws. Japan would like to underscore the 
importance of accelerating the review and developing  concrete plans for relaxing FDI restrictions.  
77. Regarding trade and trade-related policies we ha ve three comments.  Firstly, on tariff rates, 
the Philippines does not bind about 40% of tariff lines,  and among bound tariff lines, the gap between 
bound rates and applied MFN rates is relatively la rge (25.7% and 6.4%). This structure creates 
uncertainty, and so any effort to reduce this gap would be highly welcome. 
78. Secondly, on the issue of Intellectual Prope rty Rights, we have learned from Japanese 
companies operating in the Philippines that the lengt h of lawsuits on IPR issues is getting longer and 
longer, and, in some extreme cases, the period of  protection expired during the duration of legal 
procedures. This would prevent IPR holders from ta king effective legal measures. Therefore, Japan 
urges the Philippines to take appropriate measures to  shorten the period of lawsuits on IPR issues.   
79. Thirdly, regarding government procurement, according to the Secretariat Report, procurement 
from foreign suppliers is in effect limited to ar eas where domestic suppliers are not available. Japan 
welcomes the Philippines' reply in written answers that it is studying the possibility of becoming an 
observer to the GPA. We do hope that the Philippines will be a part of GPA and improve the openness 
and transparency of its procurement system. Othe r areas where we expect further reform would 
include competition policy and state-owned enterpri ses, but I will refrain from going into detail.  
80. In relation to sectoral policies, I would like to comment on services.  Firstly, regarding 
transport services, we understand that the Common Carrier Tax (3%) and the Gross Philippines Billing (2.5%) are imposed only on foreign airlines and foreign ships operators. Japan appreciates that 
the Congress is considering the removal of these tax es for foreign aviation industry. We would like to 
know more details in this regard, and wishes to be  advised as to whether the maritime industry would 
also be covered by this reform.  
81. Secondly, as for financial services, in addition to foreign capital restrictions, there remain 
domestic regulations, especially in insurance services , including the compulsory transfer of 10% of 
outward reinsurance placements to the National Reinsurance Corporation. Moreover, the foreign 
capital requirements and other restrictions are imposed  on the basis of foreign equity participation. 
Japan encourages the Philippines to reconsider  regulatory reform in this connection. 
82. In conclusion, Japan would like to reiterate its  hope that the Philippines will promote FDI by 
reviewing its extensive foreign capital restricti ons, burdensome taxes and regulations, and improve 
IPR protection and the openness of government procurement. WT/TPR/M/261 
Page 16  
 
  EUROPEAN UNION 
83. The Philippines is the first country to use alte rnative timelines for distribution of documents 
and replies, based on the revised rules of proce dure of the TPRB. The EU would like to commend the 
Philippines for this decision and encourage the Philippi nes to give feedback in this regard after its 
review. 
84. The Philippines and the EU are important trade and investment partners. Our two-way trade 
amounted to over €9 billion in 2011, with further poten tial for growth.  In this context, the EU would 
like to welcome the interest expr essed by the Philippines to explor e common objectives of a FTA with 
the EU.   The Philippines is benefitting from the EU's GSP. It is the 16
th largest user of the scheme 
with around 18% of its exports benefitting from GSP preferences.  
85. Our bilateral relationship goes far beyond trade,  as set in our Partnership and Cooperation 
Agreement, initialled in June 2010.  Our cooperation in the fight ag ainst poverty is longstanding and 
the EU continues to encourage and support the Philippines in its economic and social reform 
processes. As more trade also contributes to the achievement of the country's development objectives, 
a special effort is being made to address developm ental constraints to enable the Philippines to better 
make use of the economic opportunities offered by inte rnational trade. I would highlight here an EU-
assisted €6.5 million program on Trade Related Technical Assistance. The project aims to support sustainable poverty reduction in the Philippines by enhancing the capacity of  both government and 
non-state actors to integrate into international trad ing systems in a beneficial manner. A follow up 
project for the next four years with a budget of €8 million is also in the pipeline. 
86. Regionally, the Philippines, as an ASEAN member and party to the ASEAN free trade area, is 
engaged in a regional economic inte gration agenda. The reports describe ASEAN aims to become the 
ASEAN Economic Community (AEC) by 2015 and to create an ASEAN single market and production base comprising free flow of goods, servi ces, investment and skilled labour and freer flow 
of capital. As a strong believer in regional integr ation, the EU supports and encourages full and timely 
implementation of these regional integration pro cesses, including the adoption of regional ASEAN 
policies to remove current obstacles and im prove trade facilitation across the region. 
87. There have been important trade-related developm ents in the Philippines since its last TPR in 
2005.  The EU is pleased to note that the Philippi ne's relatively open economy has performed well 
since 2005 with an average annual GDP growth rate  of 5%. The economy has also weathered the 
global crisis well, based on continued growth in remittances. We note various positive efforts to 
reduce current uncertainties, improve the investment  climate, create more employment opportunities, 
intensify external trade relations and in crease the competitiveness of the Philippines. 
88. At the same time, the Philippines lags economi cally behind the rest of the region, with per 
capita incomes rising only slowly as its population c ontinue to expand faster than its peers. The 
structural transformation of the Philippine economy h as also been hampered by slow pace of reforms, 
inadequate infrastructure, low investme nt levels and weak governance issues. 
89. We welcome that all these challenges are cohe rently addressed in the Philippine Development 
Plan 2011-2016. We are especially happy that pr omoting transparent governance and anticorruption 
are set as horizontal, key themes of the plan. Th e Philippines has acknowledged the need to increase 
and diversify the export-oriented productivity and has indicated that SME development has a crucial 
role to play. Also, the plan highlights the need to invest massively in infrastructure and develop human resources. While no new taxes are foreseen, we welcome efforts to reform excise taxes 
(including on spirits) and rationalise fiscal incentives .  As regards trade facilitation, we note with 
satisfaction that the Philippines is taking important efforts to modernise its customs procedures.    WT/TPR/M/261 
 Page 17 
 
 
  90. While the Philippines' overall positive economic performance has been highlighted, important 
concerns remain. We are still studying the replies provided to our written questions by the Philippines 
in advance of the meeting. I w ould thus concentrate my remarks on key areas, some of which have 
been raised also during previous reviews. First, re strictions to foreign direct investment – European 
companies have been significant investors in th e Philippines over the long term, whether in the 
banking, industrial or other services sectors. Even  though measures have been taken to improve the 
business environment over the review period, many restrictions in the area of investment and 
especially in establishment remain and there is cons iderable scope for improvement. Key sectors, such 
as agriculture, fisheries and a large number of services sectors remain restricted for foreign investors, 
resulting in low FDI flows compared to other countries in the region. We therefore urge the 
Philippines to redouble its efforts in this regard. This should be accompanied by measures to improve 
the business climate, notably strengthening the le gal framework and institutions for competition 
policy enforcement and making procurement procedures more transparent for foreign investors. 
91. As a second point, I would like to raise some c oncerns on standards, particularly on sanitary 
and phytosanitary standards. In general, the EU welcomes a number of positive steps that has been 
taken in recent years in the SPS area.  However, in  particular EU exporters of meat still experience a 
lot of difficulties when trying to export meat and meat products to the Philippines. For example, the 
Philippines put trade restrictive measures in place on fresh meat when an outbreak of Low Pathogenic 
avian influenza is notified, which is not in accord ance with the OIE standard on avian influenza. 
Overall the Philippines accreditation system fo r foreign meat establishments is unnecessarily 
burdensome and is not in line with the country syst em audit approach as laid down in international 
standards. In this field, the EU encourages the Ph ilippines to further increase transparency and base its 
SPS measures on international standards with a view to not be more trade-restrictive than required. In 
this regard we would like to request for the WT O notification of the Administrative Orders on 
handling of various types of meat on meat markets.  
92. In general, competing and conflicting standards may lead to technical barriers to trade. We 
would like to encourage the Philippines to adopt  international standards as Philippines National 
Standards (PNS) in order to facilitate  and support international trade.  
93. Last, but not least, we would like to encourag e the Philippines to take measures to improve 
non-discriminatory access for foreign bidders and to lift restrictions on foreigners' participation in the 
public procurement of goods. A greater openness of the Philippines public procurement market to 
foreign bidders would promote competition and th ereby support the overarching policy objective of 
"better value for taxpayer's money", which is in the Philippines own interest. We also invite the 
Philippines to consider introducing an independent  complaints review body in its government 
procurement regime.  
94. In conclusion, we encourage the Philippines to  continue its ongoing unilateral, regional and 
multilateral efforts towards facilitating trade, incr easing investments, strengthening administrative 
capacity and enhancing the overall economic environment in a sustainable way.  
INDIA 
95. We are happy to note that the Philippines ec onomy has performed well since its last TPR in 
2005 based on a relatively open trade policy. Du ring 2005-11, GDP grew by 5%. Philippines 
experienced moderate inflation and a surplus in its  external account. Fiscal stimulus implemented in 
2008 and 2011 in response to the global economic cr isis has helped Philippi nes to maintain broad 
based growth across private consumption, investme nt and exports. For 2012, the IMF predicts a real 
GDP growth rate of 4.9%, an inflation rate of 4.1% and a surplus in the external current account 
balance of 1.3% of GDP.   WT/TPR/M/261 
Page 18  
 
  96. We have noted with interest the increase in  annual inflow of FDI from an average of 
US$1.3 billion during 1995 to 2005 to US$2.2 billio n per annum during 2006-10.  Philippines has also 
become an increasing investor in the rest of the world. In terms of trade, Philippines ranked 37
th in 
world merchandise exports and 27th in world services exports. The Philippines tariff structure is 
relatively simple. Customs procedures have been  automated to streamline payment and clearance 
procedures. IPR legislation is comprehensive and st eps have been taken to improve its enforcement. 
97. However, as noted in the Secretariat Report, the Philippines economy is operating below its 
potential. Its outward orientation makes it vulnerable to external shocks. We are encouraged to note 
that the Philippine authorities are fully cognizant of the challenges faced in terms of inadequate 
infrastructure, low investment, slow technological progress and weak institutions and governance, and 
are committed to pursuing additional domestic policy reforms to impr ove productivity and 
competitiveness as well as to pursue further tr ade and investment liberalization, address 
vulnerabilities, promote competition and build institutional capacity.   
98. We wish the Philippines success in meeting its growth target of 7-8% and creation of 
1 million jobs per year under the Philippines Deve lopment Plan 2011-16.  Proposed economic reforms 
and trade diversification should help Philippines in achieving these targets.  
99. On the bilateral front, India and Philippines signed a Trade Agreement in 1979. Trade 
between the two countries has more than doubl ed from US$444 million in 2003-04 to US$1.3 billion 
in 2010-11; with exports from India amounting to  US$883 million and imports at US$429 million in 
2010-11. The India-ASEAN FTA on trade-in-goods h as been operationalised between India and the 
Philippines in June 2011 and will give a further boost to bilateral trade.  
100. India and Philippines signed an Agreement on Avoidance of Double Taxation and Prevention 
of Fiscal Evasion in 1990 and an Agreement for Promotion and Protection of Investments in 2000. 
Indian investments in the Philippines have grown and are mainly in the field of textiles, IT, chemicals 
and steel.  
101. There is also extensive ongoing cooperation in the field of agricultural development and food 
processing, dairy development, IT, railways, rene wable energy and pharmaceuticals. Nevertheless, 
there is a considerable untapped potential and we  look forward to working with the Philippines in 
further expanding our bilateral trade and economic cooperation. We encourage Philippines to further 
liberalize its visa regime for business persons that w ould give an added fillip to foreign investment 
and trade. On the multilateral front, India and Philippi nes have been working together in the WTO on 
areas of common interest. 
NEW ZEALAND 
102. We note that the Philippines experienced a drop in GDP growth to 3.7% in 2011, but that an 
improvement in the growth rate is expected in 2012.  We note also the importance attached to 
improved governance by the Government of the Philippines.  
103. New Zealand and the Philippines share a warm and close bilateral relationship, which is 
reinforced by our common regional memberships.  These include APEC and the East Asia Summit.  
We also enjoy special trade arrangements through the comprehensive AANZFTA. A particular feature of our relationship is the growing strength of the Filipino community in New Zealand, which is now a 
key part of the skilled workforce, including in our dairy industry. 
104. Dairy exports are the biggest component in New Z ealand's bilateral trade with the Philippines.  
Bilateral trade has risen  slightly in the last two years - from NZ$858 million in December 2010 to 
$891 million in December 2011 - but there is still significant potential to grow.  Moreover there is  WT/TPR/M/261 
 Page 19 
 
 
  considerable potential to build on the existing trad e in services.  Through its development assistance 
programme New Zealand has played a founding role in the geothermal industry and in the commercial 
forestry sector in the Philippines.  Similarly it looks  to make a positive contri bution to the Philippines 
dairy sector over the next few years.   
105. The context for our bilateral trade engagement  is thus a positive one.  The Philippines is a 
valued trading partner for New Zealand. Nonethel ess there have been some recent developments 
relating to the regulation of meat products which have occasioned concern on the part of a number of 
the Philippines' trading partners.  We note that  current and proposed new regulations in the 
Philippines concerning meat products could be seen  as placing a higher food safety requirement on 
the sale of frozen or chilled (imported) meat than  on the sale of "warm" or "freshly slaughtered" 
(locally produced) meat.  New Zealand encourages th e Government of the Philippines to continue to 
consider measures which will address overall consumer  welfare, without making undue distinctions 
between fresh and frozen product, and to continue no tifying proposed regulations to the WTO so that 
relevant trading partners are able to view and comment on them before they enter into force.  
106. New Zealand welcomes the active role that th e Philippines plays in the work of the WTO, 
including the ongoing DDA negotiating process. We woul d like to conclude by reiterating our strong 
desire to continue to work closel y with the Philippines in order to grow our trade relationship.  In 
particular we look forward to working closely w ith the Philippines on the development of its dairy 
sector, and in promoting new forms of partnership in  the IT, aviation and geothermal energy sectors. 
AUSTRALIA 
107. Australia and the Philippines enjoy a longsta nding and broad partne rship underpinned by 
strong people-to-people links through trade, invest ment, cultural exchange, tourism and migration.  
Total two-way trade between Australia and the Philippines was valued at $2.8 billion in 2010-11. 
Australia and the Philippines shared commitment to work together to advance trade cooperation was 
demonstrated most recently through both countri es participation in the ASEAN-Australia-New 
Zealand Free Trade Agreement (AANZFTA).  This comprehensive agreement sets a new benchmark 
for economic liberalisation and integration in the region.  
108. Australia notes that the Philippines economy has performed well since its third TPR in 2005, 
based on its relatively open trade regime and set tings.  Australia encourages the Philippines to 
continue with its commitment to progressing agricultu ral trade liberalisation and to consider further 
reforms to enhance the productivity of its agricultural sector, in particular in relation to rice policy.  
On rice, we note paragraph 19 of the secretariat's report that highlights that greater private sector 
participation will help the NFA address some of its ve ry substantial debts.  As a fellow Member of the 
Cairns Group coalition of agricultural exporters , Australia recognises the importance of open and 
efficient food and agricultural markets in prom oting food security, and the essential contribution that 
trade reform makes towards economic deve lopment for developing countries.   
109. We note the proposed lifting of prohibitions on new bank branches in metro Manila and we 
encourage the Philippines to make further efforts to liberalise its banking sector and its services 
market more broadly. Australia welcomes the establishment of the new Competition Authority and the development of a comprehensive competition la w as outlined in the Philippines responses to our 
questions.  We also acknowledge the Philippines co mprehensive intellectual property laws and its 
efforts to enhance intellectual property enforcement.   
110. We acknowledge the Government's initiatives to  reduce public debt and to increase foreign 
investment.  We encourage the Philippines to consid er further structural reforms to achieve these 
objectives.  There is growing Australian investment  in the Philippines. The $5.9 billion Tampakan 
copper and gold mine project is seen as a bellwet her project by other foreign investors. The WT/TPR/M/261 
Page 20  
 
  Philippines is Australia's eighth largest mineral ma rket with a total value of $344 million.  The 
Philippines' mining sector has the potential, with ap propriate policy settings, to generate significant 
economic and development bene fits.  We acknowledge the Government's recent effo rts in this area.  It 
goes without saying that Australia will continue to work with the Philippines as well as with other 
WTO Members to ensure progress in the Doha Round.   
INDONESIA ON BEHALF OF ASEAN 
111. ASEAN notes that the Philippines' economy has continued to perform well since its last 
Review, achieving its highest annual GDP growth of 7.3% in 2010. We recognize that this could not 
have been an easy accomplishment, given that we we re beset with the global financial crisis during 
this period. 
112. Allow me to make a few points on specific trad e policies of the Philippines. The Secretariat 
Report highlights that the Philippines' simple average applied MFN rate stood at 6.4%, representing a further reduction from 7.4% in 20 04. We are pleased to note that this average remains low by 
developing country standards, further to which all tariff rates are ad-valorem, thereby contributing to 
transparency and predictability. ASEAN is also pleased to note that since the last Review, the 
Philippines continued to progress their liberalization of services and became signatories to the Fourth 
and Fifth Protocol to the GATS in 2006 and 2011 respectively.  
113. ASEAN would also like to commend the Philippin es in taking active efforts to improve its 
business environment and investment, including  through programmes of public and private 
partnership, the Strategic Investor Aftercare Program (SIAP) and the streamlining of business 
registrations. Whilst the Philippines has been succes sful in increasing its annual average FDI inflows 
from US$1.3 billion in 2005 to US$2.2 billion in 2010,  we note the observation in the Secretariat's 
Report that more can still be done within the cont ext of the Philippines' constitutional and statutory 
limitations on foreign investment. Such initiatives would further contribute towards ASEAN's region 
wide efforts in remaining at the forefront of FDI flows.   
114. ASEAN is also pleased to note that during th e period under review, the Philippines automated 
its customs procedures through the Electronic-to-M obile system, thereby streamlining the payment 
and clearance processes of the Bureau of Customs. We recognize these efforts as part of establishing 
ASEAN's Single Window and would therefore like to encourage its implementation.   
115. The Philippines continues to be a pillar in A SEAN, and remains unwavering in its efforts 
towards realizing the ASEAN Economic Community by 2015, which will establish a free flow of 
goods, services and investment. We highly appreciate a ll of Philippines' efforts in contributing to the 
realization of ASEAN 2015, which in turn would also  help build the momentum and comfort level for 
the Philippines to engage in further trade and inv estment liberalization at the multilateral level. In 
conclusion, ASEAN would like to thank the Philippi nes for always being a strong supporter of the 
multilateral trading system and actively participating in all areas of the DDA negotiations.  
INDONESIA 
116. It is with great pleasure that we have w itnessed the development of the Philippines as our 
fellow ASEAN member States and note down its achievements to date. As an ASEAN member, the Philippines are also highly comm itted to intensifying economi c integration among members, 
including removing barriers to trade and improving trade facilitation. With ASEAN, the Philippines also continue to pursue a policy of ne gotiating regional trade agreements.  
117. In this remarkable opportunity, please allow me  to share how both governments have been 
engaging a mutual trade relationship. Indonesia and the Philippines are important trading partners to  WT/TPR/M/261 
 Page 21 
 
 
  each other. The Government and the People of bot h countries have long maintained strong and 
bilateral relations.  
118. The trade relations between the two countr ies during 2007-11 had shown an increasing trend 
by 19.3%. Total trade between Indonesia and the Ph ilippines in 2011 amounted to US$4.9 billion, an 
increase of 17.1% compared to 2010 which was US$3. 8 billion.  Given our strong trade relationship 
and increasing interdependence, Indonesia attaches  great importance to the Philippines' commitment 
and efforts in maintaining an open trading system and an open market.  
119. Despite several concerns which we have raised  previously through written questions such as 
import of fish products, trade remedies, standard and technical regulation, Indonesia greatly 
appreciates the various efforts that the Philippin es has devoted to maintain its market openness and 
competitiveness.  We would like to encourage the Philippines to continue its focus on the 
comprehensive reform of its policies as well as th e progressive liberalization in various sectors, which 
remains on going. 
THAILAND 
120. The Philippines and Thailand are each other' s key trade partner in ASEAN and in the 
multilateral trading system.  During 2008-11, our to tal trade value averaged at US$6.3 billion per 
year.  In 2011, the trade value totalled US$7.34  billion, increasing approximately 1.12% from 2010. 
121. Thailand appreciates the Philippines' progress and effort to integrate with and facilitate the 
multilateral trade, such as the Philippines' ratif ication of the protocols to the GATS on basic 
telecommunications in 2006 and on financial services in 2011, the Electronic-to-Mobile system to 
streamline the payment and clearance process as part of ASEAN's Single Window scheme, and her efforts to encourage investment in major in frastructure projects and other sectors through the 
government's public-private partnershi ps initiative and other incentives. 
122. Thailand is also thankful for the Philippines' close and meaningful relationships in not only 
trade and investment but also culture, development and other types of coopera tion.  We celebrated our 
60
th anniversary of diplomatic relation in 2009.  President  Benigno S. Aquino III paid an official visit 
to Bangkok in May last year and Prime Minister Yingl uck Shinawatra visited Manila early this year.  
We are certain that our close ties over the past will continue to grow even more meaningfully as the 
global trade becomes more integrated and at the same time, ASEAN Members become more incorporated towards the goal of the ASEAN Economic Community in 2015. 
123. Thailand congratulates the Philippin es in participating in this year's trade policy review as the 
first pilot Member to use the alternative timeline endo rsed at the Ministerial Conference last year.  We 
have submitted the questions on  different matters, for example, on investment, service sectors, 
customs valuation, and agriculture and manufacture policies. To conclude, Thailand appreciates its 
longstanding ties with the Philippines in multilateral, re gional, and bilateral rela tionships both in trade 
and beyond.   
CHILE 
124. Over the past few years, the Philippines' economic performance has been positive, with 
sustained growth that was interrupt ed only by the international cris is.  This has been accompanied by 
increased employment and controlled inflation.  Ho wever, the persistent budge t deficit and a massive 
public debt are threatening to undermine the country's economic stability. 
125. According to the Philippines Development Plan 2011-2016, the country will have to 
overcome considerable challenges in order to secu re better long-term economic performance.  These WT/TPR/M/261 
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  challenges include a low investment rate, fiscal cons traints, a heavy debt burden, slow technological 
progress due to poor infrastructure, low leve ls of human capital and weak institutions. 
126. The trade regime is relatively open, althoug h certain agricultural products are still highly 
protected, including rice and sugar.  We would like to highlight the initiatives taken by the Philippines 
in the customs area, which include automation and the implementation of the single window.  
Moreover, the Philippines acceded to the Revised Kyoto Convention.  These reforms should help to 
facilitate trade operations and to stimulate economic activity. 
127. We think that the Philippines should review its policies to encourage FDI in preferred areas 
listed in the Investment Priority Plan.  Ther e are certain tax incentives contingent on export 
performance of companies and subject to ownership r estrictions.  The Secretariat has also stressed the 
detrimental effect of poor infrastructure on FDI flows. 
128. Chile and the Philippines are members of some of the same groups in the WTO.  We are 
together in the Cairns Group and the agricultural G- 20.  We are also both members of APEC.  All of 
this shows how close our positions are in the economic and trade areas. 
129. Finally, we would like to point out some areas in which we think there is room for progress 
between now and the next Review.  We urge the Philippines to increase its tariffs bindings because 
this would make its trade regime  more predictable.  We also urge the Philippines to bring its 
notifications under the Agreement on Agriculture up to date, thereby contributing to transparency 
within the WTO. 
MEXICO 
 130. The development of the Philippine economy has b een impeded by a lack of domestic reforms 
and by infrastructural deficiencies, public manage ment problems and a low level of investment.  
One of the result is that a quarter of the population lives below the poverty line. 
131. At the same time, international reserves gr ew significantly, from US$18.5 to US$62.4 million 
during the period 2005-2010, reaching an equivalent of 12.3 months of imports in 2010.  This is 
primarily due to the high inflow of remittances, whic h nearly doubled over the past five years, and to 
the good performance of its exports. 
132. In spite of recent measures to create a favour able business environment, the Philippines has 
maintained important restrictions on the participati on of foreign investors in areas such as agriculture 
and fisheries, and in certain services sectors (financial services, telecommunications, maritime services, etc.).  Unfortunately, according to the Report by the S ecretariat the Philippines does not 
envisage any concrete changes in the short term to  remedy this situation which accounts for the fact 
that, in comparison to its neighbours, it has attract ed considerably less FDI.  But there are other 
factors that have prevented the Philippines from ta king full advantage of its potential, such as poor 
infrastructure and the growing competition from the other, highly competitive ASEAN economies. 
133. Although the challenges facing the Philippines' economy are enormous, it is essential that the 
Government should introduce reforms aimed, inter alia , at reducing its heavy public debt, 
encouraging trade liberalization and investment , and promoting competition in the services area. 
134. While the average Philippine applied MFN tariff is  relatively low, its tariff structure shows a 
more pronounced tariff escalation in the textiles a nd leather sector, followed by wood and furniture, 
paper, chemicals and non-metallic mi neral products.  Consequently, as indicated in the Report by the 
Secretariat, these industries enjoy c onsiderable effective protection.  WT/TPR/M/261 
 Page 23 
 
 
  135. At the same time, the Philippines has taken a number of noteworthy initiatives to facilitate 
trade, for example automated procedures to si mplify customs payment and clearance processes, and 
the forthcoming establishment of a single nationa l window which will help to streamline trade not 
only within its ASEAN partners, but also with third parties. 
136. While we were pleased to note that the Philippines had abolished its local content 
requirements for soap and detergent manufactur ers as well as those for the Car Development 
Programmes, we are concerned from a systemic point of view that in 2007, the Philippines introduced 
mandatory incorporation of locally sourced biofuel into gasoline and diesel.  Not only is this measure 
far from efficient, but it will inevitably be inoperativ e, since the domestic supply of biofuels forecast 
for 2012 will be outpaced by growth in demand, so that the biofuel for incorporation into the fossil 
fuels will have to be imported. 
137. The licensing system remains complex, with a wide range of non-automatic, automatic and 
special licensing systems.  The procedures for granting licences vary according to the product, 
i.e. whether or not it is subject to a quota, or wh ether it is agricultural or industrial.  We urge the 
Government of the Philippines to review its licensing system in order to make it more operative and to 
facilitate trade. 
PERU 
 
138. Peru shares with the Philippines a number of challenges of the kind that are specific to 
developing countries seeking to build up the different sectors or of their respective economies.  At the intergovernmental forum level, we maintain a di alogue and mutually coopera tive relations with the 
other countries of the Pacific Basin through the As ia Pacific Economic C ooperation Council (APEC), 
and we have joined the WTO Information Techno logy Agreement as well as the three negotiating 
groups on agriculture, the Cairns Group, the agricultural G-20 and the G-33. 
139. On that subject, we urge the Philippines to continue complying with the WTO notification 
requirements with respect to agri culture:  special safeguard, domes tic support, export subsidies and 
tariff quotas, subsidies and countervailing measures, and State-trading activities. 
140. We welcome the fact that the Government of the Philippines, like us, has introduced policies 
to improve the business environment.  We appreciate their efforts to promote competition, improve human capital, abolish restrictions on foreign inv estment, reduce incentives, and reform State-owned 
institutions, as well as to promote public-private pa rtnerships, which will un doubtedly have a positive 
impact on its trade and economic performance. 
COLOMBIA 
 
141. The Philippines has an outward-looking economy, and has therefore been vulnerable to 
external crises.  However, it has been successful in confronting these difficult situations, and has 
achieved an annual real GDP growth rate of 5% dur ing the period from 2005 to 2011, thanks in part to 
the fiscal stimulus package implemented in 2008 in response to the global economic crisis.  It also 
recorded a current account surplus thanks to the high volume of remittances, which represent 
approximately 10% of GDP. 
142. However, persistent fiscal deficits and the la rge public debt, attributable among other things 
to the overuse of potentially distorting fiscal ince ntives such as those granted to export-oriented 
enterprises, continue to pose the great est risk to macroeconomic stability. 
143. Services constitute the most important sector in terms of contribution to gross national 
income (42% in 2010) and employment (48% of the labour force).  Although during the period from WT/TPR/M/261 
Page 24  
 
  2005 to 2010 the Philippines became a net exporter of services, the country continues to depend 
extensively on exports of manufactured goods, which represented 85% of total merchandise exports in 
2010. 
144. The Philippines' inflow of FDI increased fro m an annual average of US$1.3 billion during 
1995-2005 to US$2.211 billion in 2006- 2010.  However, in spite of the country's efforts to attract 
FDI, these figures remain lower than those recorded in other countries of the region.  This is probably 
due to a variety of factors, including lack of  adequate infrastructure, growing competition from 
neighbouring economies and numerous restrictions on FDI as a result of an overall policy of ensuring 
that key sectors are effectively controlled by Philippine  nationals.  This means that they are restricted 
for foreign investors, notably agriculture, fi sheries, and a large of number of services. 
145. With respect to the Philippines'  trade policy, the Report by the Secretariat points to a number 
of significant achievements that we would like to highlight.  Measures were taken during the review 
period to improve the business environment, includi ng the streamlining of the registration of business 
names, the Anti-Red Tape Act, and the public-private  partnerships to promote private investment.  
However, there remains plenty of room for improveme nt in that area.  Customs procedures have been 
automated through an electronic system to streamlin e the payment and clearance processes.  While the 
country's record on making notifications to the WTO has continued to be solid, there remain delays 
when it comes to agriculture, subsidies and count ervailing measures, and State-trading activities.  
This makes it difficult to know what programmes and measures are under way in the country and to 
what extent it has complied with its commitments. 
146. Finally, we would like to stress that the Philippine authorities, in accordance with the 
Government's vision and aims, ha ve decided to launch new domes tic policy reforms, including the 
promotion of trade liberalization and investment a nd the improvement of the quality of the country's 
human and institutional capital in order to boost productivity and to ad apt to international 
competition. 
PAKISTAN 
147. Philippines and Pakistan have a long history of cordial relations and bilateral trade between 
the two countries, can be enhanced through diversifi cation of the product range.  The balance of trade 
is in favour of Pakistan but the size of bilateral tr ade remains very small.  Both sides are now pursuing 
the possibility of increasing trade through product diversification and by addressing tariff and non-
tariff barriers.  Besides trade, both countries also enjoy excellent diplomatic relations and learn from 
each other's experiences of promoting good governance and pro poor policies. 
148. Philippines is one of those countries who have re bounded fast after the globa l financial crisis.  
Although its GDP dipped as low as 1.1% in 2009 but it witnessed its highest annual GDP growth 
of 7.3% in 2010.  The major factors which cont ributed to this achievement are peaceful national 
elections, the renewed trust in the government that introduced crucial reforms to improve tax 
collections, increased revenue and prudent financ ial management.  The result was controlled budget 
deficit and low interest rates.  Record levels of  remittances and increased export earnings also led to 
an improvement in the country's credit outlook which led to higher FDI. 
149. Industrial sector remained in the driving seat as it witnessed 12. 1% growth from a decline of 
0.9% in 2009.  Services also grew by 7.1% in 2010 as compared to 2.8% in 2009.  However, agriculture went down from zero growth in 2009 to -0.5% in 2010. 
150. Philippines' efforts to introduce domestic reforms through the Mid-Term Philippines 
Development Plan 2004-10 are worth analyzing.  They have addressed the in frastructural needs by 
regrouping the geographic regions of the country in to "Super Regions" with the aim of spreading  WT/TPR/M/261 
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  development in the countryside.  Special efforts are being made to ensure availability of micro-
finance to the marginalized sectors through e-banki ng platforms such as SMS based mobile banking, 
branchless banking and the promotion of broad based  financial literacy and consumer protection.  
Personal Equity and Retirement A ccount Act of 2008, The Philippine Payment and Settlement System 
(PhilPass) and Republic Act No. 9576 and Re public Act No. 9510 are worth mentioning. 
151. The Electronic-to-Mobile customs project has also  played a leading role in trade facilitation, 
it has allowed Interned based a nd later SMS enabled transactions.  Leading to less face to face 
transactions, more efficiency and the use of te chnology to control corruption and improve trade 
efficiency. 
152. Meeting future energy needs remains a challe nge for Philippines and the over arching theme 
of the PEP (Philippines Energy Plan) 2009-2030 is to ensure the best energy choices for a better 
quality of life.  The IPP (Investment Priority Plan ) is also geared towards addressing the challenges 
like climate change and green economy. 
153. It would not be fair to talk about Philippi nes' trade regime without mentioning their 
commitment to the multilateral trading system.  Th ey have actively contributed to the Doha Round 
negotiations and have remained interested in corr ecting the imbalances on the distribution of benefits 
accruing from the multilateral trading system. 
154. I wish them success in their efforts to implemen t future policy directi on which they have set 
in their PDP 2011-2015.  I am sure they would be able to face the challenges of fiscal constraints, 
poor infrastructure and poverty through a sound framework of an incentive growth strategy.   
KOREA, REPUBLIC OF 
155. First of all, we would like to commend the Philippines for its positive economic performance 
during the period under Review with an average re al GDP growth rate of 4.9% from 2005 to 2011 
peaking at 7.6% in 2010, which was made possible th anks to the Philippines' active pursuit of various 
reform programs as well as its well-managed macro economic policy efforts.  At the same time, 
however, we would like to note, as some other delega tes did previously, the finding in the Secretariat 
Report that the Philippines' economy is operating belo w its potential due to the slow pace of reform 
while some of the key constraints on overall growth  remain, such as inadequate infrastructure, low 
investment, and governance issues. 
156. In this respect, we sh are the view that the Philippine govern ment needs to take further reform 
measures that include easing restrictions on fo reign investment, expanding investment in 
infrastructure, and improving human capital and institutional quality to compete with neighbouring 
low-cost economies, as highlighted  in the Secretariat Report. 
157. In particular, we would like to encourage th e Philippine government to further promote 
foreign investment and freer trade by streamlini ng the investment incentive systems that vary 
according to 13 different investment promotion ag encies and by rationalizing the seemingly unfair tax 
systems for foreign aviation and maritime transport service providers, such as the Common Carriers 
Tax (CCT) and the Gross Philippine Billings Tax (GPBT) . In this regard, we would appreciate it if the 
Philippine government could share with us more information on the progress in the pending amendments of the relevant legislation. 
158. In addition, the complex import licensing syst em and far-reaching restrictions on foreign 
participation in the government pr ocurement market, particularly in the area of engineering consulting 
where foreigners' participation is completely proh ibited, need to be reviewed and improved in a WT/TPR/M/261 
Page 26  
 
  timely manner in order to promote the compe titiveness and productivity of the relevant domestic 
industries of the Philippines. 
159. We are pleased to note that the bilateral tr ade between the Philippines and Korea has been 
growing robustly, with Korea being the Philippines' fifth largest trading partner, and the Philippines 
standing as Korea's 23
rd largest trading partner in 2011 with a merchandise trade volume reaching 
US$11 billion. Korea has also been an important inv estor for the Philippines, being the third largest 
source of foreign direct investment in 2010. We believe that such a dyna mic economic partnership 
between our two countries will be further strengthene d for our mutual benefit through initiatives such 
as the Korea-ASEAN FTAs covering investment as well as goods and services. 
160. We highly value the Philippines' commitment to the multilateral trading system and its active 
participation in the regular WTO activities and the DDA negotiations. We expect that the Philippines 
will continue to make meaningful  contributions to the timely conclusion of the DDA negotiations, as 
it will help facilitate the Philippines' reform process as well as those of other WTO Members. 
UNITED STATES 
161. The Philippines and the United States are strong allies and partners.  We share history, a 
common language, and extensive linkages between our  peoples, including more than four million 
Filipinos and Filipino Americans living in the United States.  The magnitude of our trading 
relationship further underscores these close connec tions.  Our two-way trade has grown over the 
decades to $22 billion in 2011, comprising $17 billion in goods trade and $5 billion in services.  The 
Philippines is a leading beneficiary of our GSP pr ogram, with roughly $1 billion of Philippine goods 
exports to the United States entering the U.S. mark et duty free every year.  Our two-way investment 
stock is roughly $7 billion. 
162. There is no better symbol of our close, long-sta nding trade ties than the American Chamber of 
Commerce in Manila - the first U.S. Chamber of Commerce overseas, established in 1902 and incorporated in 1920, it has been active in fost ering commercial linkages between our countries for 
more than one hundred years.  We are close part ners in APEC and have a good dialogue with the 
Philippines, bilaterally and here at the WTO.  We  are optimistic about the future direction of our 
engagement. 
163. This TPR is taking place at an important time for the Philippines, with the government of 
President Aquino taking significant steps to fight corruption and create a strong foundation for expanded economic growth, including through the A quino Government's five-year Development Plan.  
The United States recognizes the importance of these e fforts, which have the potential to significantly 
enhance the economic performance of the Philippin es and make it a more attractive place for trade 
and investment.  We hope this TPR will be useful to the Philippines as it plans and implements governance and policy reforms in key areas. 
164. The investment climate promises to be a theme of our discussions today, as it was during the 
previous TPR.  The Government Report notes that it is now official policy to attract, promote, and 
welcome productive investments from abroad.  Ye t, as the Secretariat Report notes, foreign 
investment restrictions remain extensive in th e Philippines and inward foreign investment lags 
compared to that of other countries in the region.   Given the importance of foreign investment in 
energizing economic growth and crea ting jobs, we would be interested  in hearing from the Philippines 
on its plans for further reform, including reduction of the Foreign Investment Negative List.  In particular, are there certain sectors where your government is considering further market opening in 
the near term?  The Government Report also not es that the Philippine government is leveraging 
public-private partnerships to enhance its a ttractiveness and competitiveness as an investment 
destination.  We would be very interested in learni ng more about the government's efforts in this area.  WT/TPR/M/261 
 Page 27 
 
 
  165. We commend policy reforms being undertaken by  the Philippines in the customs area.  For 
example, the Philippines has acceded to the revi sed Kyoto Convention.  Our two countries have 
agreed on a bilateral protocol with commitme nts on the transparent publication of customs 
regulations, the use of advance rulings, and increasing the de minimis  level for express shipments.  
The Philippines is demonstrating commitment and l eadership in these efforts, which have great 
potential to streamline trade, reduce corruption, and improve customs co llections.  During this review, 
we would welcome an update from the Philippine de legation on prospects for passage of the customs 
legislation currently before the Philippine Congress.  
166. In the agriculture sector, the United Stat es and the Philippines have a booming trade 
relationship.  Last year, Philippine exports of agricultural products to the United States exceeded 
$1.7 billion, covering a wide range of products incl uding coconut oil, raw sugar, processed fruits, and 
tuna. Meanwhile, U.S. exports of agricultural pr oducts were $2.1 billion, up significantly from 
$800 million in 2005.  For some products, including f ood and beverages, the Philippines is our fastest 
growing market in Asia and one of the fastest grow ing in the world.  Our two countries have a shared 
interest in continuing our good work together to  ensure a strong science-based foundation for our 
agricultural trade, for the benefit of consumers and exporters.  On meat handling, as you know, we 
continue to be very concerned about regulations  that impose very rigorous requirements on certain 
kinds of meat that are primarily imported, but no requirements at all on freshly slaughtered domestic 
meat.  Such regulations are inconsistent with we ll-established science on food safety.  At the same 
time, we feel that we have made some progress in  our bilateral discussions and hope that we will be 
able to fully resolve this issue as soon as possible so that imports of safe, high quality meat products 
from the United States and other countries are not disrupted.  
167. On intellectual property rights, we remain concerned about weaknesses in the enforcement 
environment, including the very small number of c onvictions achieved in IPR cases in recent years. 
At the same time, we recognize th e efforts of the Philippine Government to improve the situation, 
including through the issuance by the Philippine Supr eme Court of new rules to improve the handling 
of IPR cases in the court system. In addition,  we acknowledge progress made by the Philippine 
Government in reducing camcording piracy followi ng the passage of an Anti-Camcording Law. These 
are important steps in the right direction. During th is TPR, we would be interested in learning more 
about the Philippine Government's plans to impr ove its IPR regime, including by passing the long-
awaited copyright legislation currently before the Philippine Senate. After more than a decade in the 
legislative process, passage of this important legislation would send a strong signal that the 
Philippines is motivated to improve its IPR environment and join a growing number of countries in 
the region taking steps to nurture creativity and innovation. 
168. Our two governments have for some time in formally explored the possibility of the 
Philippines becoming a signatory to the WTO Agreem ent on Government Procurement.  In light of 
the benefits that could accrue to the Philippin es from GPA membership, we strongly encourage the 
Philippines to join the WTO Agreement on Government Procurement. 
169. We look forward to closer cooperation with the Philippines here at the WTO, bilaterally, and 
in APEC.  We also look forward to continuing to  work with the Philippines and other Members to 
strengthen the global economy and the rules-based multilateral trading system embodied by the WTO.  
SINGAPORE  
170. Singapore would like to associate with the ASEAN statement delivered earlier. We express 
appreciation for the Philippines' willingness to adopt the alternative TPR timelines, which we believe 
has brought greater depth to our discussion today.  As an ASEAN neighbour, Singapore enjoys stable 
economic relations with the Philippines. In 201 1, bilateral trade amounted to US$12.9 billion 
(S$16.3 billion).  Singapore was the Philippines' fourth  largest trading partner, while the Philippines WT/TPR/M/261 
Page 28  
 
  was Singapore's 15
th largest trading partner.  Both countries also enjoy strong and growing investment 
linkages.  As of end 2010, Singapore's investment s in the Philippines reached S$5.2 billion, a 21% 
overall increase from S$4.3 billion in 2008.  Our comp anies are active in the property, retail and ICT 
sectors. 
171. We warmly welcome the fact that the Philippi nes economy has performed well since its last 
TPR in 2005, based on a relatively open trade regime .  One of the key messages we heard from other 
members speaking today was the great potential for the Philippines to further improve its economic 
performance and enhance its international competitive ness.  We agree with th e assessment that this 
can be achieved through the speeding up of reforms and adopting pro-investment policies.   
172. In this regard, it is encouraging to learn about  the proactive steps taken by President Aquino 
and his administration to revitalize the investment  climate, and improve the Philippines' economic 
outlook.  For example, the 2011 Philippines Investme nt Priorities Plan aims to address the need for 
accelerated infrastructure development, increase competitiveness amongst its key industries and make 
provisions for increased private sector participati on in the economy.  We also note the Philippines 
efforts to boost investor confidence through im provements made to its legal framework.   
173. We urge the Philippines to continue its pursu it of policies to ease restrictions on foreign 
investment, promote more competition, reduce in centives and reform state-owned institutions.  
Coupled with sound macroeconomic policies, these  initiatives would certainly steer the Philippine 
economy toward achieving the targets and objectives outlined by the Philippines Development Plan 
2011-2016.  Here, we join other speakers in welcomi ng the Philippines' interest in the Government 
Procurement Agreement, as acceding to this Agreem ent is a meaningful way to address some of the 
issues raised about government procurement. We ar e confident that the feedback the Philippines hears 
from this TPR will be constructively considered in Manila.  We believe that these will be positively 
factored into reforms to provide a pro-business cl imate, which is the best stimulus for economic 
development and growth.   
CANADA 
174. Canada and the Philippines enjoy strong, dynami c commercial relations, with bilateral trade 
totalling CAD$1.5 billion in 2011.  We ha ve strong economic ties in the Philippine 
telecommunications industry, which represents one of the rising and vibrant sectors of the economy. At the same time, the Philippines continues to be an important export market for Canadian agri-food 
in Southeast Asia.  In addition, Canada is enhanc ing its presence in the Philippines' infrastructure and 
mining sectors. 
175. Recently, the Philippines has made positive sugg estions about the expansion of trade ties 
between our two countries. While, Canada views such  overtures favourably and will continue to work 
with the Philippines in order to strengthen our comme rcial relationship, our engagement will remain 
dependent on the Philippines making efforts to r esolve outstanding bilateral trade irritants. 
176. Canada is concerned with the recent ordinances passed by the Philippine state of Zamboanga 
del Norte and South Cotabato.  Canada considers these ordinances to be in conflict with the Philippine 
Mining Act of 1995 , which permits open-pit mining operations  with the approval of the Philippine 
government's Mines and Geosciences Bureau. These ordinances may negatively impact the significant 
investments that Canadian companies have made in  the Philippines resource sector.  Canada will be 
watching developments in this area closely, thou gh we are encouraged by  the support Canadian 
stakeholders have received from the nati onal government of the Philippines. 
177. Canada is troubled by occasional protectionist reflexes exercised by Philippine authorities 
responsible for the agricultural sector.  Canada st resses the importance of a dherence to commitments  WT/TPR/M/261 
 Page 29 
 
 
  made under the WTO, and the need to avoid trade di storting regulatory policies in all sectors of a 
member state's economy. 
178. Canada commends the Philippines' government  for its anti-corruption agenda, pursuing 
outward-oriented economic and trade policies, and urges it to continue on its path of growth.  Canada 
will continue to work with the Philippines and othe r Members to advance our collective interests and 
goals in this and other forums.  
BRAZIL 
179. Brazil notes with satisfaction that the Philippines' economy has had a real GDP growth rate of 
5% during 2005-11, recovering thus from a sl uggish performance that followed the 1997 economic 
crisis in Asia.  In 2010, the rate of GDP growth in the Philippines reached, at 7.6%, its highest level 
since 1976.  Resumption of growth has been coupled with a moderate inflation rate of 5% during the 
same period. 
180. Measures undertaken over the past few years ha ve certainly contributed to these favourable 
economic developments.  Those measures include maintaining a floating exchange rate regime 
coupled with inflation targeting, implementing fi scal discipline and economic reform in order to 
attract FDI.  This has created a positive dynamics that has caused the economy of the Philippines to be 
now ranks as world's 37th largest exporter and 29th importer of goods. 
181. The Philippines has established an ambitious Development Plan for 2011-16 that forecasts 
annual growth rates of 7-8% and the creation of one million jobs per year.  This is a clear sign of its 
commitment to balance economic prosperity with social development. 
182. It shall be noted, however, that, according to the reports before us, the Philippines' economy is 
still confronted with persistent fiscal deficits a nd a large public debt.  Both pose a threat to its 
macroeconomic stability in the long run.  The Ph ilippines also pursues a strict policy on national 
ownership in many key sectors of its economy, wh ich not only hinders FDI inflows but may also 
distort competition.  The licensing system remains complex and could also be simplified so as to provide exporters to the country with not only an expedite process but also with a higher degree of 
transparency and predictability.  Brazil believes that  there is also room for improvement in further 
liberalizing the agriculture sector.  Some products, such as rice, sugar and corn, are still faced with 
several trade restrictions that include high impor t tariffs and/or trade being conducted by state 
agencies only. 
183. Bilateral trade relations with the Philippines are based on solid economic foundations.  They 
have increased and diversified over the past few ye ars.  In 2007-11, bilateral trade increased 20%, 
jumping from US$731 million to US$874 million.  Brazilian exports to the Philippines, although 
more diversified than in the past, are still concen trated on raw materials, mainly iron ore, tobacco, 
beef and chemical products.  On the other hand, imports by Brazil are predominantly made up of 
semi-manufactured products likewise concentrated on a basket comprising electrical and mechanical 
machines, along with precision instruments, that together account for more than 80% of total imports.  
VIET NAM 
184. First of all, I would like to express our association with the ASEAN Joint Statement presented 
this morning.  We are also well aware that the gl obal financial crisis in 2008 punctuated the review 
period of the Philippines' trade policy.  Despite th is discouraging factor, the country's economy grew 
at its fastest pace, expanding 7.3% in 2010.  With its remarkable economic performance, I believe that 
the TPR review of the Philippines will be interes ting as it will give us an overall picture of measures WT/TPR/M/261 
Page 30  
 
  put into place during the crisis and how they transl ate into concrete results and help improve the 
economy. 
185. Bilateral economic relationship between Viet Na m and the Philippines has always been good.  
The Philippines is the fifth largest trading partne r of Viet Nam among the ASEAN member countries.  
Since 2008, Viet Nam's yearly exports to the Philippines have often been over US$1 billion, the 
highest figure within the ASEAN.  In 2011 on ly, two-way trade recorded US$2.34 billion. 
186. In terms of investments, by the end of 2011,  the Philippines had 59 projects in Viet Nam, 
ranking 27
th out of 94 countries and territories investing in our country.  The two countries are 
considering to promote cooperation in a number of  fields such as oil and gas, electricity and 
petroleum. 
187. Viet Nam appreciates the developments that th e Philippines has made despite the global crisis 
and believes in the country's future policy directions as stated in its Government Report.  We strongly 
hope to deeply and broadly develop the bilateral tr ade relations between the two countries.  Viet Nam 
would also like to encourage the Philippines to further increase market access for some products of 
Viet Nam such as rice and float glass.  The Phili ppines is a major market for Vietnamese rice, 
accounting for around 30 to 40% of total value of Viet Nam's rice exports annually. 
188. Viet Nam welcomes the Philippines' active par ticipation in the Doha Development Agenda 
negotiations and its full support for the agenda.  We  share the view with the country that "the 
multilateral trading system can genuinely contribut e to economic growth and development if the 
negotiations remain true to its development spirit".  
NIGERIA 
189. Nigeria is pleased to note that the economy of  Philippines has performed  well thanks to the 
open trade regime.  Among the factors that contributed to the positive performance by 2010 were the global economic recovery, the peaceful conduct of th e national elections, and the renewed trust in 
government that implemented crucial reforms th at ensured improved tax collections, increased 
revenues, and prudent manage of e xpenditures.  This contained the bud get deficit and lowered interest 
rates.  Record levels of overseas remittances c oupled with increasing export earnings led to an 
improvement in the country's credit outlook, attracti ng foreign portfolio and direct investments, and 
boosting the peso's strength that kept domestic inflation low. 
190. Nigeria is also pleased to note that the refo rm programme embarked during the period under 
Review has resulted in positive economic performance.  Real GDP grew at an annual average rate of 
4.9% in 2005-11 (against 3.6% over 1993-2002), peaking at 7.6% in 2010 the highest growth rate 
since 1976.  Growth has been broad-based across pr ivate consumption, investment and exports, and 
helped by fiscal stimulus implemented in 2008 in response to the global economic crisis.  These factors offset the adverse impact of the typhoons in the latter part of 2008 and the drought in the first 
half of 2010. 
191. However, the Secretariat Report indicates that GDP growth has been insufficient to further 
reduce the unemployment and underemployment rates,  which remained high.  Some of the key 
constraints on overall growth identified in the Philippine Development Plan 2011-2016 are low 
investment, slow technological progress because of in adequate infrastructure, and weak institutions 
and governance.  Nigeria would like know what effo rts the Government of the Philippines is making 
to address the constraints?  WT/TPR/M/261 
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  192. Since its last Review, Philippines has conc luded bilateral and FTAs with a number of 
countries and continues or plan negotiations with ot hers.  My delegation hopes that the agreements 
would not affect Philippines participation in the multilateral trading system. 
193. At the bilateral level, relations between Nige ria and Philippines have been sustained over the 
years by the mutuality of interests and the friendship of our people.  To that end, Nigeria continues to 
be a hub for overseas Filipinos primarily workers invol ved in the oil, gas and construction industry.  
By the end of 2011, there were 7,240 Filipinos living in Nigeria. 
194. In conclusion, Nigeria considers Philippines as an important WTO Member and we look 
forward to further collaborating with Philippines in  the ongoing DDA negotiations.  In this context, 
we wish to acknowledge the constructive and proactiv e engagement of Philippines in the negotiations.   WT/TPR/M/261 
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  V. REPLIES BY THE REPRESENTATIVE OF THE PHILIPPINES AND ADDITIONAL 
COMMENTS 
195. As the first Member to use the alternative timelines, we thank other Members for their 
constructive insights. Giving Members the opportunity to evaluate our replies prior to the meeting has 
resulted in more thoughtful and focused statements. We believe that the review process became more 
effective because of relevant interventions, whic h added depth to the discussions.  The exercise was 
also more efficient; the questions raised from th e floor were mostly confined to those not yet 
addressed in our replies. We have submitted our responses to all of the written questions. We hope 
that delegations have had the opport unity to make an initial reading of our second set of replies.  
196. The Philippine economy exhibited extraordinary resilience despite many  tough winters. For 
us, spring has now arrived. Our economy has been st rengthened by the painful lessons learned and the 
reforms implemented during those difficult winters.  We think that our economy is now poised to 
bloom with the full colors of spring. Last Tuesd ay, we explained our confidence in the Philippine 
economy. Allow us to further expound on the basis for our optimism and share with you a glimpse 
into the future. In so doing, we will be responding to the comments and questions raised by Members 
during our last meeting.  
197. Many Members recognized that the Philippin es has taken positive steps towards achieving 
sustainable growth and more open trade. However, it was also noted that we need to address some 
challenges. The progress of the Philip pines, like any other developing co untry, is a work in progress. 
We have achieved steady growth in the past two decades. We have put in place some much-needed 
reforms. However, where we are headed is as equally  important as where we are. There are four main 
points that will show that we are on the right tr ack, and that the elements needed to reach our 
destination already exist. These are: a roadmap, trusted leadership, sufficient momentum, and an 
objective self-awareness. 
198. Firstly, the Philippine Development Plan (PDP) is  the roadmap that points to our destination. 
The destination is inclusive growth. In the plan, tr ade is a tool to achieve inclusive growth, meaning 
we seek open and fair trade for the benefit of all. By pursuing it in the overall context of development, 
trade is subject to progressive liberalization. Ou r objective for market openness goes hand in hand and 
is balanced with intermediate objectives in the PDP. By seeking to diversify export products and 
markets, trade is used to strengthen macr oeconomic stability and enhance productivity and 
employment. Trade is also pursued in the broader 21
st century context of connectivity across the 
border and domestic reforms behind the border.  
199. In the PDP many of the medium-term, cross- cutting concerns raised by members – such as 
lack of competitiveness, poor infrastructure, unreali zed growth potential, vulnerability to external 
shocks, and the need for further reforms – have  been identified and are being addressed by the 
implementation of strategies in the Philippine Development Plan. 
200. Secondly, we have a leadership that possesses credibility and enjoys the unprecedented trust 
and support of the Filipino people. After a landslid e election victory in 2010, President Aquino has 
consistently achieved trus t and approval ratings of above 70%. Th is strong public support is critical as 
the administration continues to pursue his platfo rm of good governance and anti-corruption. Political 
will is essential in implementing the Philippine De velopment Plan. Specifically, political capital is 
needed to push through with the remaining reforms.  
201. In this regard, we expect good governance a nd transparency initiatives to continue, and are 
hopeful that more competition policy and relate d structural reforms will be implemented. 
Establishment of discipline and the proper functioning of the domestic markets will in turn lead to inclusive growth and facilitate the considerati on of further market openings in the future.  WT/TPR/M/261 
 Page 33 
 
 
  202. Thirdly, the Philippines possesses the momentum  necessary to propel us towards our goals. 
The accomplishments that many Members acknowle dged the other day serve as a strong foundation 
for building momentum through current initiatives.  
203. In the area of transparency and procurement,  for instance, initial outcomes are encouraging. 
The first public-private partnership (PPP) project wa s successfully bided out last year. This early, the 
Department of Public Works and Highways has con ducted the bidding for most of its projects for the 
full year, with notices of awards released for r oughly 70% of its projects. This bodes well for our 
infrastructure development. Furthermore, the number and quality of bidders signifying their interest to 
bid on projects has improved. Reputable firms previ ously wary of corruption have come forward to 
the bidding floor. On a contract for the constr uction of school buildings, the PPP Center received 
17 interests to bid, many of them first-time bidders.  
204. To boost tourism and inclusive growth, we have established a liberalized domestic and 
international civil aviation policy to encourage the entry into the Philippines of more domestic and 
international players providing air services.  Under the Philippine Development Plan, full 
implementation of Executive Order No. 219 (1995) w ill be pursued. Towards this end, EO No. 29 
dated 14 March 2011 was issued to enforce a "pocket open-skies policy" to boost the country's 
competitiveness as a tourism destination and investment location. It now allows airlines from foreign 
countries to fly to gateways like Ce bu and Davao International Airports. 
205. To address the concerns of some regarding the enforcement of our comprehensive intellectual 
property law, special IP courts have been designate d and rules have been established.  Furthermore, 
the Anti-Camcording Law was passed in 2010. Just last Tuesday, the Data Privacy Bill was approved 
by the Senate; it will now be reconciled by a bicam eral conference committee with a counterpart bill 
approved by the House of Representatives last year. The Intellectual Property Office of the 
Philippines is also the first IP office in the Asia Pacific region to establish a multi-door justice system 
comprising of a quasi-judicial function for adjudi cating IP conflicts and the two alternative – 
mediation and arbitration mechanisms.  Also  under deliberations in Congress is a proposed 
competition policy law. Momentum will help determ ine the sustainability of our initiatives and how 
far our trajectory will reach. 
206. Fourthly, possessing an objective amount of  self-awareness is importa nt in determining our 
capabilities and limitations. This empowers us, as a sovereign nation, to make informed, rational 
decisions on trade policy matters in the context of our international commitments, our overall 
objective of inclusive growth, and domestic  political and socio-economic realities. 
207. Some Members have lamented the gap between our bound and applied tariff rates, saying it 
does not promote predictability. We beg to differ.  The Philippines has never breached its bound rates, 
and this, together with the fact that all tariff rates are ad-valorem, giv es more credence to the 
predictability of our tariff regime. And as mentione d in our opening statement, the overhang provides 
a degree of policy space, which we need as a developi ng country. The fact that our applied rates have 
been reduced since the last Review and are rela tively low compared to other developing countries 
should only bring added comfort to others.  
208. We also seek to balance the legitimate trade in terests of our trading pa rtners with our national 
interests. For instance, on agri cultural standards, a number of Members have raised the issue of 
hygienic meat handling rules as embodied in our Department of Agriculture's Administrative Order 
22 or AO 22. This Order has now been supplanted with AO 5 on newly slaughtered meat and AO 6 on 
chilled, frozen and thawed meat.  These two ne w AOs have benefited much from extensive 
nationwide consultations, inclusive of interested trading partners, and address our food and meat 
safety concerns as well as the legitimate commercial interests of concerned trading partners.  As pointed out by a member, much progress has been achieved through intensiv e technical discussions WT/TPR/M/261 
Page 34  
 
  towards resolving implementation issues.  In additi on, the rules would ensure not only the safety of 
these products but also the protection of the origin al integrity and quality of  covered meat products 
under Philippine wet market conditions. 
209. On investments, some members have suggested that foreign equity restrictions, in some 
services sectors for example, should be lifted. These caps on foreign participation are mandated by the 
Constitution and by statutes. They are also subject  of the ongoing DDA negotiations. Nonetheless, we 
wish to point out that we continue to improve ou r investment environment through initiatives such as 
the Investment Priorities Plan, rationalization of  our incentives, improving the business environment, 
and cutting the cost of doing business. 
210. On the calls by some Members for the Phili ppines to join the Government Procurement 
Agreement as an observer, we are still considering our options. We will have to review the new GPA 
as agreed by the parties in December 2011.  
211. On our debt burden, we are aware of the c oncerns of Members. However, we also note 
significant improvements. In fact since 2004, our public sector debt-to-GDP ratio has gone down from 
70.1% in 2004 to 31.6% in 2010. 
DISCUSSANT 
212. Let me try to summarise the main points arising from that first session.  It was interesting to 
note that Members' intervention focussed on a numbe r of similar themes of governance, the foreign 
direct investment regime and trade policies. 
213. On the positive side, Members acknowledged the important and proactive role that the 
Philippines played in the DDA negotiations, in ASEAN integration, particularly trade facilitation, and 
APEC initiatives aimed at liberalising trade. 
214. But reforms are proceeding at a slow pace.  Mention was made of the objectives of the 
Development Plan 2011-2016 and much store was se t by this addressing issues of weak governance 
and institutions, improving the bus iness environment and greater a dherence to internationally-
recognised standards.  All of these were areas of  concern where there is room for improvement. 
215. Foreign direct investment lags in the region.  Particular mention was made of restriction of 
banking and other financial services along with tele communication, mining and agriculture.  The visa 
regime could also be improved.  Given the calls  for diversification of the economy away from its 
traditional bases, the Philippines' heavy debt and fiscal  deficits incurred in servicing this, the need to 
improve infrastructure to make the country more co mpetitive and perform up to its full potential in the 
region, ways of attracting more FDI need to be explored. 
216. On trade policies, Members mentioned uncer tainty over applied and bound tariffs, and 
reference to SPS and IP problems was also made.  The complexity of import licensing procedures was 
mentioned, as was a degree of protectionism afoot bot h in agriculture and industry.  It was felt that 
successful conclusion of the DDA would assist in th is regard.  A number of signatories to the GPA 
encouraged the Philippines to consider joining that agreement, and also to look at other competition-
friendly policies. 
217. Last but not least, many delegations appreciated  the fact that the Philippines had volunteered 
to have the first TPR under the revised timelines, and it is clear, as pointed out by Undersecretary 
Cristobal, that the objectives of that initiative have been realised.  WT/TPR/M/261 
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  218. To conclude, therefore, the Philippines has made  significant progress since the last review in 
2005, but there is some way to go yet, and we look forward to reviewing how fast the Philippines will have travelled towards this goal unde r its current development plan by the time of its next review in 
2017.   
UNITED STATES 
219. I would like to offer some follow-up questions for your consideration.  We appreciate the 
Philippines' efforts to submit its notifications on RT As.  Please explain what steps the Philippines is 
taking to submit other notifications referenced in pa ragraph 8 of the Secretariat report, including with 
respect to the Committee on Agriculture (special safeguard, domestic support,  export subsidies, and 
tariff quotas), subsidies and countervailing measures, st ate-trading activities, TBT, and rules of origin. 
220. Next, on paragraph 20 of the Secretariat Repor t, it indicates that the Philippines' Foreign 
Investment Act enumerates economic activities in which foreign equity is either prohibited or limited 
to a certain percentage.  We therefore seek add itional information regarding the Philippines foreign 
investment restrictions, resulting from the appli cation of the Foreign Investment Act or other 
legislation.  Specifically, what is the current st atus of legislation that would allow 40% foreign 
ownership of cable systems that do not produce their own content or programs? 
221. We also ask to please explain why the Philippines tests for salmonella on raw meat products 
at the port of entry and condemns any shipment testing positive for salmonella.  A zero tolerance 
standard for salmonella is unwarranted because it is generally accepted by food safety experts and 
scientists that pathogens cannot be entirely elim inated from raw meat, and that proper storage, 
handling, and cooking of raw meat reduce significantly the risk of a number of food ‐borne diseases 
caused by these microbes.  In light of this, pleas e explain whether the Philippines tests domestic raw 
meat products for salmonella and if so, whether th e testing is conducted at the same rate.  Please 
provide all Philippine government testing results fo r salmonella, with respect to both domestic and 
foreign raw meat.  Moreover, please explain why certain meat products, like pork offal and 
mechanically deboned meats, are now subject to in creased testing while other meat products are only 
subject to random sampling. 
222. The Philippines stated that a bill on incentives rationalization is currently under deliberation 
in Congress.  When does the Philippines expect th e bill to pass in Congress?  Please also explain 
whether any of the incentives contained in the b ill under deliberation in Congress are contingent upon 
exportation?  In light of its obligations under th e Subsidies Agreement, when does the Philippines 
expect to submit its notifications for all notifiable subsidies currently in effect? 
223. Finally, in paragraph 68 of the Secretariat Re port notes foreign equity in public utilities is 
constitutionally limited to 40%.  The report also in dicates earlier (page 20, paragraph 20) that the 
Philippines' Foreign Investment Act enumerates econom ic activities in which foreign equity is either 
prohibited or limited to a certain percentage, incl uding public utilities. We therefore seek additional 
information regarding the Philippines' foreign in vestment restriction for certain public utilities, 
including electricity.  Can the Philippines please conf irm that it has determined that the electricity 
sector should no longer subject to a 40% foreign ownership limitation?  In arriving at such a 
determination, what factors did the Philippines consider in making its determination that the 
electricity sector should not be considered a "public utility?" 
EUROPEAN UNION 
224. We have presented some follow-up questions in  order to fully understand the Philippines' 
investment policy. I will not read these questi ons but only I will mention the areas our follow-up 
questions concern.  Firstly, they concern restrict ions in foreign investment including relevant WT/TPR/M/261 
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  constitutional provisions preventing the relaxation of th e foreign equity requirements.  Secondly, they 
refer to foreign ownership of land, and thirdly, they are related to foreign equity limitations in 
telecommunications sector and in the professional services sector.   
225. In this context, we would like to again enc ourage the Philippines to redouble its efforts to 
further liberalize and improve its trade and investment  climate.  Furthermore, in the area of SPS we 
encourage the Philippines to furt her increase transparency and base its SPS measures on international 
standards with the view to not be more restrictive than they are required.  In conclusion we once again 
encourage the Philippines to continue its ongoing e fforts at the unilateral, regional and multilateral 
levels towards facilitating trade, increasing inv estment, strengthening administrative capacity and 
enhancing the broad economic environment in a sustainable way.   
CANADA 
226. Canada would like to thank the Philippines fo r the answers provided to our advance written 
questions.  We would like to take the opportunity to  flag some follow-up questions pertaining to the 
inspection of meat in the Philippines.  The Philippi nes has indicated over the course of this TPR that 
inspection standards are the same for domestic a nd imported meat.  With regard to the March 2012 
Amendment to the NMIS Memo 835 stipulating rigid testing of all shipments for imported pork offal and deboned meat for salmone lla, Canada would like to know what procedures are in place for testing 
of domestically produced meat, and whether the Philippi nes can share the results of such testing.  Can 
the Philippines also share the relevant administrative orders for testing of si milar domestic products?   
JAPAN 
227. Japan has one follow-up question to inquire about the details of the refund system of Tax 
Credit Certificates (TCCs). Our capital is still review ing the replies to some of the questions which 
were circulated yesterday. Therefore, in advan ce, Japan reserves the right to submit possible follow-
up questions regarding the Philippines' second set of replies.  
228. Japan sincerely expects the Philippines to make the most of this Review opportunity and take 
appropriate actions on some challenges such as opening government procurement market, the 
promotion of FDI, and improvement of IPR prot ection. In addition, Japan considers governance 
reforms and trade policy accountability are also im portant, which some Members mentioned on the 
first day of Review.  WT/TPR/M/261 
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  VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
229. This fourth Trade Policy Review of the Ph ilippines has provided us with an excellent 
opportunity to improve our understanding of the Philippines' trade and trade-related policies and 
practices and how they have evolved since the previous  review in 2005.  We are grateful for the active 
participation of the Filipino delegation headed by H.E. Mr. Adrian Cristobal Jr., Undersecretary of 
Trade and Industry.  I would also like to thank th e discussant, Mr. Martin Glass of Hong Kong-China, 
and Members of the TPRB for contributing to our fruitfu l exchange of views.  At the outset, I note the 
very comprehensive comments that have been made by Undersecretary Cristobal on a number of themes. 
230. Members commended the Philippines for the pos itive economic performance over the last 
few years.  This was based on a relatively open trad e regime and helped by high remittances inflows 
and fiscal stimulus in response to the global econo mic crisis.  However, Members noted that the 
Philippines' economy is operating below potential and encouraged the Philippines to speed up reforms, further improve its business environment a nd liberalize its FDI regime in order to raise 
productivity and compete more successfully with lo w-cost neighbouring economies.  Delegations also 
expressed their hope that the Government's recently  launched public-private partnerships initiative 
will encourage investment in major infrastructure projects. 
231. Members acknowledged the Philippines' strong co mmitment to the multilateral trading system 
and praised the Filipino delegation for being the firs t to use the alternative timeline for questions and 
answers agreed in the fourth appraisal of the TPRM.  I concur with Undersecreta ry Cristobal in that in 
this case, the use of the alterna tive timeline has resulted in more focused comments and questions.   
They also encouraged the Philippines to fully m eet its notification obligations under various WTO 
Agreements.  Delegations noted that the Philippi nes has been increasingly implementing its trade 
policies through an extensive network of pref erential trade agreements, mainly through its 
participation in ASEAN but also bilaterally.  
232. Members expressed their appreciation of the step s taken by the Philippines to facilitate trade 
including by introducing automated customs procedur es, further simplifying its tariff and by reducing 
its simple average MFN applied rate to 6.4%.  At  the same time, some Members voiced concern about 
the predictability of applied tariffs.  They called for further action by the Philippines to bind more 
tariff lines and bring its tariff bindings down close to its applied tariff rates.  Members also 
encouraged the Philippines to further simplify it s non-tariff measures, notably its import licensing 
system. 
233. In the observations made by delegations duri ng this Review, there were suggestions for 
further action or improvements in certain areas.  I note from the Philippines' concluding statement that 
action is already being taken in several of these areas: 
 
• Incentives:  Taxes and other incentives, often contingent on export performance and 
Filipino ownership, are provided by the Philippines in  an effort to attract investment. Since those 
incentives add pressure on the budget deficit and discour age efficiency, the Philippines was invited to 
rationalize and harmonize them. 
 • SPS and TBT:   Members requested the Philippines to further increase transparency 
and base its SPS and TBT measures on internationa l standards with a view to avoid imposing 
unnecessarily burdensome requirements. WT/TPR/M/261 
Page 38  
 
   
• Competition:  There was  appreciation for the designation of the Department of 
Justice as the Competition Authority.  However, th e Philippines was encouraged to adopt a general 
competition law and further promote competition in the economy. 
 • Government procurement:  While acknowledging that the government procurement 
regime allows for the participati on of foreigners, Members expressed concern about the existence of a 
strong preference for domestic goods and services.  Th e Philippines was asked to consider using its 
public procurement framework to develop the infr astructure in a cost-effective manner.  Some 
Members also encouraged the Philippines to jo in the Government Procurement Agreement. 
 • TRIPs:  Members welcomed the steps taken by the Philippines to strengthen inter-
agency collaboration and called on the Philippin es to take actions to further improve IPR 
enforcement.  
 • Agriculture:   Questions were asked about the auth orities' efforts to make agriculture 
more productive and efficient and encouraged the Philippines to further liberalize the sector, in 
particular certain sensitive products  such as corn, rice, and sugar. 
 • Energy:   Members invited the Philippines to meet its energy requirements through 
clean and sustainable sources.  The adoption of  the Renewable Energy Act 2008 opening up 
investment opportunities for the sector was seen as a positive development. 
 • Services:   Members indicated that further multilateral liberalization of services 
should improve the efficiency of the Philippines' economy as a whole and the competitiveness of its 
exports, especially by reducing costs related to  banking, telecommunications, and transport.  
Addressing infrastructural weaknesses would help th e Philippines to tap the vast potential tourism 
represents, given its natural beauty and historical heritage.  
234. This successfully concludes our fourth Review  of the Philippines.  The large number of 
advance questions and the many interventions by  Members indicate the important role of the 
Philippines in the WTO.  I encourage the Philippi nes to pursue its reforms, including further 
improvement of its multilateral co mmitments both in goods and services.  I also recommend that 
Members support the Philippines in its continuing effo rts, amongst other things, by providing further 
market access to its goods and services.  For the Philippines' economy, spring is indeed starting but 
there is a need for more hard work and tending loving care for it to enjoy the full blooms of high spring and the ripe fruits of summer. 
 
__________