The deal is set to open up new opportunities for South Korean businesses in one of Southeast Asia’s most dynamic economies, according to a report released Monday by the Korea Trade-Investment Promotion Agency (KOTRA).
The Philippines, South Korea's 15th-largest trading partner and home to nearly 120 million people, is projected to post strong economic growth of 5.8 percent this year and 6.1 percent in 2025. This positions the country as an increasingly attractive market for South Korean exports.
Under the agreement, tariffs on internal combustion vehicles and cargo trucks will be eliminated immediately, while those on electric vehicles and auto parts will be phased out over five years.
The deal also benefits consumer goods, such as stationery, processed foods, and home appliances, which are expected to gain a competitive edge as South Korean cultural influence continues to grow in the Philippine market.
The FTA extends beyond trade, fostering cooperation in high-tech sectors including smart farming, smart cities, and renewable energy.
The Philippine government aims to increase renewable energy's share of its power generation from 22 percent to 35 percent by 2030 and is developing three smart cities as part of its modernization efforts.
"KOTRA will actively support Korean companies' FTA-related inquiries through our Manila center," said Lee Ji-hyung, head of KOTRA's international trade and economic collaboration.
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