Europe-PH News

THE Philippine economy has demonstrated remarkable resilience in the face of global headwinds. With projected GDP growth 5-6 percent in 2026 — above the global average — and a young, dynamic population, the country remains one of Southeast Asia’s most promising investment destinations and an indispensable partner for Europe.

Yet as we engage regularly with the European-Philippine business community, one message stands out clearly: optimism must now be matched by execution.

The ECCP’s 2025 Business Sentiment Survey highlights this dual reality. Sixty-seven percent of European companies view the Philippines as central to their global operations, and over one-third report outperforming other regional branches. These are strong signals of confidence. However, 90 percent still cite regulatory bottlenecks, complex tax systems and customs inefficiencies as persistent constraints.

Momentum is visible. Government reforms are reshaping the investment landscape. The Create More Act, public-private-partnership (PPP) law, the expansion to 99-year land-lease for foreign investors and right of way act — instrumental to accelerating infrastructure development — and the exit from the FATF grey list collectively signal improved predictability and alignment with global standards. The recently passed Konektadong Pinoy Act aims to unlock a digital economy projected to grow above $100 billion by 2030, with internet users expected to grow from 97.5 million in 2025 to 110 million by the end of the decade.

For European investors, particularly in green energy, advanced manufacturing, water, agriculture, education, and health care, these developments offer a blueprint for scalable, long-term partnerships.

Two milestones will define the next phase of EU–Philippine relations.

First, the ongoing negotiations for the EU–Philippines Free Trade Agreement (FTA). Both sides aim to conclude discussions within the year. A successful agreement would provide a stable, duty-free framework beyond the expiring GSP+ scheme and significantly elevate the Philippines’ attractiveness for European capital and technology.

Second, the Philippines’ Asean Chairmanship in 2026 offers a strategic platform to shape regional integration. By championing supply chain diversification, sustainability, and digital transformation, the country can reinforce its role as a reliable, rules-based gateway to the Indo-Pacific.

Despite rising seven places in the 2025 World Competitiveness Report’s economic performance index, the Philippines ranks 51st out of 69 economies. Challenges in labor flexibility and tax policy remind us that reform intent must be reinforced by consistent implementation.

Sustained investor confidence rests on three pillars: enforcement, accountability, and transparency.

At the ECCP, we remain committed partners in building a future-ready investment environment. The vision of a “Bagong Pilipinas” is welcome, but it must be felt in every customs process, every tax filing and every local government transaction.

The opportunity is clear. The foundations are in place.

Now is the moment to convert optimism into measurable progress — and to shape a decade of stronger, deeper EU–Philippine partnership.

Paulo Duarte is general manager at Bosch Philippines and country manager for mobility aftermarket. Concurrently, he serves as the president of the European Chamber of Commerce of the Philippines.

Source: The Manila Times