Free Trade Agreement Philippines China

Free Trade Agreement between Philippines and China: Understanding its Implications

The Philippines and China have signed the Free Trade Agreement (FTA) on November 20, 2018, in an effort to bolster economic ties between the two countries. This agreement is expected to increase trade and investment flows between the Philippines and China, ultimately benefiting consumers and businesses in both countries. In this article, we will explore the benefits of the agreement, its implications for various industries, and the challenges that may arise from its implementation.

Benefits of the Free Trade Agreement

One of the main benefits of the FTA is the reduction of tariffs and other barriers to trade between the two countries. This will lead to increased exports and greater market access for businesses in the Philippines. Additionally, the agreement is expected to attract more Chinese investors to the Philippines, creating jobs and boosting economic growth.

The agreement also covers services and investments, which will open up new opportunities for Philippine companies to penetrate the Chinese market. This will allow for the exchange of knowledge, technology, and expertise between the two countries, leading to more innovative and cost-effective products and services.

Implications for Various Industries

The FTA has significant implications for various industries in the Philippines. For example, the agriculture sector is expected to benefit from increased exports of bananas, pineapples, and other fruits to China. The agreement also provides better access for Philippine poultry and livestock products to the Chinese market, which could lead to greater demand and higher prices for these products in the Philippines.

The manufacturing industry is also expected to benefit from the FTA. With the reduction of tariffs, Philippine manufacturers can source cheaper raw materials from China, allowing them to lower their production costs and be more competitive in the global market. Additionally, the agreement will encourage more Chinese companies to invest in the Philippines, which could lead to the creation of more manufacturing jobs.

Challenges of the Free Trade Agreement

Despite the potential benefits of the FTA, there are also several challenges that may arise from its implementation. One issue is the potential influx of Chinese products into the Philippines, which could lead to increased competition for local producers. This could also lead to a decline in the quality of locally produced goods, as consumers may prefer cheaper Chinese products.

Another challenge is the possibility of Chinese companies dominating certain industries in the Philippines. This could lead to a lack of competition and reduced innovation, as Chinese companies may not feel the need to innovate in a market they already dominate.


Overall, the Free Trade Agreement between the Philippines and China provides an opportunity for both countries to strengthen their economic ties. While there are potential challenges that may arise, the benefits of increased trade and investment flows outweigh the risks. It is now up to businesses in both countries to take advantage of these opportunities and work towards achieving mutual prosperity.

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