Manila, Philippines - The French Chamber of Commerce and Industry in the Philippines (CCI France Philippines) reports a surge in inquiries from French companies looking to invest in the Philippines, following progress in free trade agreement (FTA) negotiations with the European Union (EU) and the launch of direct flights between the Philippines and France.

In an interview with BusinessWorld at the French-Philippine Business Forum last Friday, CCI France Philippines President Jacques Christophe Branellec stated, "We have clearly seen an increasing interest from the French side to invest in the Philippines in the last few years."

He added, "Many large French companies are investing in sectors like renewable energy and infrastructure. There have also been attempts in the agriculture sector, and there is significant interest across defense and energy in general."   

Furthermore, he sees significant opportunities in the retail sector, given the already substantial presence of French brands and products in the Philippine market. Mr. Branellec noted, "France has a lot to offer to the Philippines and the Philippine market, and the Filipino consumer market also highly values French brands and products."   

The Philippines currently benefits from the EU's Generalized Scheme of Preferences Plus (GSP+) and is in the process of negotiating an FTA with the EU. Mr. Branellec pointed out, "There is a significant trade deficit between France and the Philippines, which can be improved by exporting more Philippine products to France and increasing French investment and product imports." The annual trade volume between the two countries amounts to €3 billion.   

French Minister Delegate for Foreign Trade, Economic Attractiveness, and French Nationals Abroad, Laurent Saint-Martin, stated that over 150 French companies currently operate in the Philippines, employing approximately 100,000 local individuals. He explained, "This number is increasing every year, reflecting the expanding economic cooperation between the two countries and the growing interest of French companies in the Philippine market."  

However, Minister Saint-Martin assessed that the trade volume between the Philippines and France "does not yet meet its potential," emphasizing, "The Philippines is only France's sixth-largest trading partner in ASEAN. This is an indicator of the untapped opportunities we need to seize together."

He expressed optimism that the recently launched Air France direct flight route would contribute to boosting trade, tourism, and business exchanges. Minister Saint-Martin said, "It is the only direct flight from Manila to Europe. It is crucial to enhance people-to-people exchanges to directly showcase the strengths and willingness to cooperate between our two countries." He further added, "This new route will be a tangible milestone in our bilateral relationship. I sincerely hope this direct flight will help raise the profile of the Philippines within the French business community."

Air France's Country Manager in the Philippines, Pamela Villaroman, reported a 25% market growth since the direct flight route opened in December, with more Europeans visiting the Philippines and an increase in Filipinos traveling to France and other European countries. Ms. Villaroman stated, "We have seen a high load factor of around 80-90% since the opening in December." She acknowledged that more effort is needed to attract European tourists but assessed the overall performance since the launch as positive. Air France is currently collaborating with travel agencies and local operators to increase European tourist arrivals in the Philippines.

Regarding the slower pace of European tourist arrivals compared to the increase in Filipino travelers, Ms. Villaroman explained that European travelers have other options within Southeast Asia. She noted, "There are other options for the entire European community, not just France, such as Indonesia and Thailand," but added, "The Philippines is a growing market, and the Philippine Department of Tourism is working very hard to promote the Philippines as a major tourist destination in Southeast Asia. There are also many diving spots that Europeans enjoy."   

Meanwhile, Minister Saint-Martin emphasized that the EU-Philippines FTA is not just a mutually beneficial agreement but an essential tool for fully realizing the potential of the French-Philippine partnership. He stated, "The FTA will improve market access, create new business opportunities, and provide a clear and predictable framework for investors on both sides." He affirmed, "Therefore, France fully supports these negotiations and stands ready to work with the Philippines to achieve a cooperative and mutually beneficial agreement."

According to Philippine Trade and Industry Undersecretary Allan B. Gepty, the Philippines and the EU are scheduled to hold their third round of negotiations in June. Undersecretary Gepty stated, "We can say that the negotiations are progressing smoothly according to the agreed timeline. Of course, we also have inter-sessional meetings to address issues in the various negotiating clusters." He added, "So far, the negotiations have been very smooth, and our discussions with the EU side have been very productive and constructive. So, we are hoping that we can fast-track the text-based negotiations and proceed to the market access discussions."

Undersecretary Gepty cited the Philippines' impending graduation from the EU GSP+ program as one factor driving the urgency to conclude the FTA swiftly. He emphasized, "We are trying to avoid a situation where our preferential trade in the EU market will be discontinued. It is very important to conclude the FTA negotiations before our GSP+ graduation."

Fueled by the recent remarks from high-ranking French officials and the impact of the Air France direct flight launch, economic cooperation between the Philippines and France is expected to become even more active. The successful conclusion of the EU-Philippines FTA negotiations is anticipated to serve as a catalyst for further strengthening bilateral relations.

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