Manila, Philippines – The implementation of the South Korea-Philippines Free Trade Agreement (FTA) on December 31 is poised to significantly boost South Korean exports to the Philippines, particularly in the automotive and parts sectors.

The Ministry of Trade, Industry and Energy and the Korea Trade-Investment Promotion Agency (KOTRA) revealed this in a report titled "Promising Export Products and Cooperation Opportunities Following the Implementation of the South Korea-Philippines FTA."

With a population of approximately 120 million, the Philippines is South Korea's 15th largest trading partner. The country is projected to maintain robust growth rates of 5.8% this year and 6.1% next year, solidifying its position as a promising export market.

KOTRA has identified internal combustion engines, commercial vehicles, electric vehicles (with tariffs set to be eliminated within five years), and automotive parts as key export items that will immediately benefit from tariff removal. Furthermore, consumer goods such as stationery, processed foods, and household electronics, which have gained popularity in the Philippines due to the Korean Wave and are known for their design and quality, are expected to experience increased exports as a result of reduced tariffs.

The FTA is also anticipated to foster greater cooperation between the two countries in sectors such as smart farming, smart cities, and renewable energy. The Philippines' government has been actively pursuing agricultural modernization policies, leading to a growing demand for technological collaboration to enhance crop productivity. Additionally, the Philippine government has set a goal of developing three smart cities as part of its infrastructure development initiatives.

Aligned with the Philippines Energy Plan (PEP), the country aims to increase the share of renewable energy in its energy mix from 22% in 2022 to 35% by 2030. Consequently, the demand for renewable energy projects is expected to rise.

"KOTRA will actively support Korean companies with specific inquiries regarding FTA utilization through our Manila Overseas FTA Utilization Support Center," said Lee Ji-hyung, head of KOTRA's Economic and Trade Cooperation Division.

[Copyright (c) Global Economic Times. All Rights Reserved.]