Trade

Philippines is next stage of UAE’s Asean trade push

May 7, 2024, 9:50 AM

Shoppers in the Philippines' capital, Manila. UAE trade with the country was worth $2 billion in 2023

UAE and Philippines aim for free trade
Trade worth $2 billion in 2023
UAE moving into Asean region

Negotiations on a free trade agreement between the UAE and the Philippines began this week as the Gulf state turns its focus to the Association of Southeast Asian Nations bloc (Asean).

Manila is hoping to seal a deal before the end of this year, said Allan Gepty, undersecretary for international trade at the Department of Trade and Industry, as he announced the first round of talks for the comprehensive economic partnership agreement (Cepa).

Data from the Philippine Statistics Authority showed total trade between the two countries reached nearly $2 billion in 2023.

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Philippine exports to the UAE were valued at $342 million, while the country’s imports from the UAE exceeded $1.5 billion.

The UAE is the Philippines’ second-largest trade partner in the Middle East and Africa after Saudi Arabia, accounting for about 30 percent of its total trade.

The talks are part of a wider push by the UAE into the Asean region, which consists of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

The UAE-Philippine trade talks were initially announced in December — The UAE-Philippines trade talks were initially announced in December

In addition to completed deals with Indonesia and Cambodia, Cepa negotiations are also underway with Thailand, Malaysia and Vietnam.

The UAE and Asean countries shared more than $15 billion in trade in the first half of 2023, up 2 percent on the same period in 2022. The bloc represented more than 5 percent of the UAE’s total non-oil foreign trade in 2022, exceeding $32 billion.

According to Global Media Insight, Filipinos constitute nearly 7 percent of the UAE’s total population – about 700,000. Around 450,000 live in Dubai, representing more than 20 percent of the emirate’s total population.

Last month port operator DP World inaugurated a major upgrade at the Batangas Passenger Terminal, which has doubled capacity to eight million passengers a year.

Located 110 km from Manila, the terminal serves as the country’s largest inter-island hub.

The company also opened the Tanza Barge Terminal at Cavite, providing a direct sea link to Manila. It is expected to handle up to 240,000 20-foot equivalent units a year and save approximately 150,000 truck trips.

“The Asia Pacific region is a cornerstone of our global growth strategy,” said DP World chairman Sultan Ahmed bin Sulayem. “We are committed to driving regional growth through partnerships and investments.

“We see significant potential in Southeast Asia as a growing hub for global trade, driven by strong economic growth and intra-regional trade.”

UAE-Philippines trade

Data from the Philippine Statistics Authority shows Saudi Arabia is the country’s biggest trade partner in Mena, totalling nearly $2.4 billion.

Salmon, a consumer fintech company backed by Abu Dhabi sovereign wealth fund ADQ, said in January it will acquire a majority stake in a Philippine rural bank.

The Philippines and Qatar signed nine agreements aimed at boosting trade and investment between the two countries last month as part of a visit by Emir Sheikh Tamim bin Hamad Al Thani to Manila.

Last year Emirates and Philippine Airlines signed an interline agreement to boost connectivity for passengers, using a single ticket and one baggage policy.