British companies in the Philippines are looking forward to higher bilateral trade between the Philippines and the UK following the successful launch of the Developing Countries Trading Scheme—a UK initiative on strengthening trade.
“So we’re very optimistic and obviously, as we said, we’ve reached a high of €2.4 billion in trade combined. And now, we’re looking forward to seeing DCTS further boost that along with trying to get investments from the UK and the key sectors in the Philippines,” said British Chamber of Commerce of the Philippines president Chris Nelson in an interview Monday.
He said the UK has made preferential trading with partners easier, particularly with developing countries, in terms of country of origin and the reduction of tariffs on 150 more tariff lines.
“So all of these should see a significant boost, particularly in agriculture. And I think it just reinforces potential growth areas between the two countries,” Nelson said.
The UK decided to continue the preferential trade scheme with trading partners when it broke away from the European Union and pursue trade as an independent nation. The DCTS is the UK’s alternative to the EU Generalized System of Preferences Plus.
The UK Embassy, in coordination with the Department of Trade and Industry, launched the DCTS in the Philippines on June 7, 2023, and the scheme officially took effect on June 19.
Nelson said the impact of the trading scheme could not be measured, as of the moment, as it barely rolled out, but expectations were high that bilateral trade would benefit partner countries like the Philippines. This would include more goods in the preferential trade list and more products would be traded at 0 tariff.
The UK said DCTS is one of the most generous trade preference schemes in the world that benefits 65 countries, 3.3 billion people and over €20 billion of exports to the UK each year.
The scheme offers duty-free, quota-free trade on several thousands of products, leading to €750 million of reduced import costs, yearly. The Philippines figured in the enhanced preference tier with over 92 percent of exports to the UK duty-free, under the DCTS.
Philippine exporters are expected to benefit from an estimated combined tariff savings of €21 million for businesses compared to UK global tariff.
The UK has also waived the restrictive compliance requirement to international conventions and provides opportunities to DCTS countries to supply products that are high demand to the UK.
Nelson said the UK Embassy in the Philippines, together with other groups, would organize intensive promotional activities to educate and engage Philippine exporters to participate in the trade program.