Front Cover

Contents

Overview

1. Trade Relations

1.1. Trade in goods: main trends

1.2. Trade in services

1.3. Rankings: imports, exports and overall trade volume

1.4. Comparison of EU-Philippines trade with other main trading partners

1.5. Philippines’ trade with EU Member States

1.6. Structure and trends by product

1.7. EU preferential trade with the Philippines

2. Investment flows and stocks

2.1. The EU’s FDI in the Philippines

2.2. Philippines’ FDI in the EU

3. People-to-people exchanges

3.1. Migrant Filipinos in the EU and their remittances

3.2. EU tourists to the Philippines

3

4

4

5

6

7

10

12

14

16

16

17

19

19

20

Message from the EU Trade Commissioner 2

2

I hope this short publication will provide you with some useful facts and information about bilateral trade and investment between the Philippines and the EU.

The EU is the biggest economy and the largest trader in the world, and is also one of the most open economies. The average applied tariff for goods imported to our markets is very low, particularly so when taking into account the preferential market access most countries enjoy. More than 70% of goods imports are entering the EU market at zero or reduced tariffs; and nearly 90% of imports from the Philippines enjoy such zero or reduced tariffs.

The EU is deeply committed to trade liberalization and market opening in ways that are conducive to growth and investment at times of economic change. Trade is indeed an effective engine of growth in today’s world. More and better, trade has lifted millions out of poverty and helped create sustained growth in many regions of the world, and I am a strong believer in open markets backed up by clear and enforceable rules. We would be delighted to foster our trade partnership, a partnership between equals, with the Philippines on this basis.

This agenda encompasses a range of issues including the liberalisation of investment opportunities and services sectors, as well as access to tendering markets. In this sense, the experience with agreements with other countries in the world, such as Chile, indicate that comprehensive liberalisation allows to reap the full benefits of a far-reaching deal early on.

The ASEAN region remains a key trading partner of the EU. In this context I am pleased to note the growing dynamism of the Philippine economy, which I hope can be sustained through further reforms in the Philippines’ trade and investment regime. For the Philippines, the EU remains its 5th largest trading partner, accounting for 9% of its total trade in goods, even though the true importance of the EU as trade partner of the Philippines is likely to be understated due to the rise of regional and even global production networks

The EU is the world’s largest exporter and actively advances its bilateral trade agenda. Nevertheless, the multilateral agenda, the cornerstone of all rules-based trade, remains a crucial point of our trade policy agenda.

Within the framework of the new Lisbon Treaty, the EU has also gained new competencies on investment, including the protection of European investments abroad. In turn, the EU is working to convert Europe into an even more attractive destination for foreign investors.

Message from the EU Trade Commissioner

3

EU–Philippinestrade[excludingthevolatilegold trade]modestlydeclined in2011andremained

stablein2012.EU-Philippinestraderemainedaffectednotablybytheworldwideslowdowninparts

oftheelectronicssector,aswhilethePhilippineGovernmentisseekingtodiversifyitsexport-base,

some60%ofthePhilippines’globalexportsarestillcomingfromtheITsector,whichsuffereda5%

declinein2012.Asdiversificationtakestime,thisconcentrationofPhilippinesexportsonproductsin

onesectormakesitsexportperformancehighlyvulnerabletoexternaldemandfluctuations.

However,whilePhilippine exports of IT products to theEUdeclinedby 7%, othermanufactures

performedbetter:overallmanufacturingexportsincreasedby2%to€4.2billionin2012andexports

offishproductsequallyimproved,albeitadeclineintotalagriculturalexportsby14%,mainlydueto

adropinexportsofcoconutoilandfruits.In2012,EUexportstothePhilippinesincreasedby20%.

EU-Philippinestradeinservicesdeclinedby2%to€2.1billionin2011,asPhilippineservicesexports

totheEUincreasedby3%to€1.2billionwhileservicesimportsfromtheEUdeclinedby7%to€1

billion.ThisraisedtheservicestradesurplusofthePhilippinesto€224million.

Intermsofforeigndirectinvestments,theEUremainsthelargestinvestmentpartnerofthePhilippines

withitstotalstockofinvestmentsrisingfurtherto€7.6billion(latestfiguresof2011)-orabout28%

oftotalFDIstockinthePhilippines,althoughEUFDIflowsintothePhilippinesfellby29%tosome

€0.5billionin2011.

TheEuropeanUnionisthefifthlargesthostofland-basedmigrantFilipinosandremainsthelargest

employerofFilipinoseafarers.FilipinomigrantslivingandworkingintheEUaswellasFilipinoseafarers

manningEuropeanships,togethersent$2.8billion(€2billion)tothePhilippinesin2012,makingthe

EUthesecondlargestsourceofremittancestothePhilippines.

Also,theEUremainedthe5thlargestsourceoftouriststothePhilippinesin2012,withthenumberof

EUtouristsreachingarecord349,000andanincreaseof10%in2012.

Overview

There are discrepancies between Eurostat’s trade statistics and the Philippines’ National Statistics Office trade statistics, due, among other things, to variations in exchange rates.

EU-Philippinestradedeclinedby4%to€9.9billionin2012.However,ifvolatilegoldtradeisexcluded,PhilippinetradewiththeEUappearstohavebeenstablein2011androseby8%in2012.EU-Philippinestraderemainsaffectedin2012bytheworldwideslowdowninsomepartsoftheelectronicssector.Philippineglobalexportsofelectronicproductsdeclinedby5%in2012.

At€9.9billion,EU-Philippinestradeisnearlybacktoitspre-crisislevelof2007.ThegeneralslowdeclineregisteredinthelastdecadeseemstohavebeenhaltedbutsofarnoupwardtrendsimilartootherASEANpartnerscanbedetected.AsthePhilippineeconomyregisteredstronggrowth(+6.6%GDPgrowth)in2012whiletheEUeconomyenteredintoamildrecession(-0.3%GDPgrowth),EUexportstothePhilippinesgrewby20%while its importsdeclinedby20%,bringingtwo-waytradenearlyinbalanceforthefirsttimeinmanyyears.Ifvolatilegoldtradeisexcluded,PhilippineexportstotheEUappeartohavemodestlydeclinedby4%in2011andremainedbroadlystablein2012.

EU-ASEANtradegrewby10%to€181billionin2012.ASEANexportstotheEUcontinuedtoexpand,growingby5%toatotalof€100billion,whileEUexportstoASEANincreasedby18%to€81billion.

Intermsofbilateraltradein2012betweenthe27EUMemberStateswiththePhilippines,3outofthePhilippines’6mainEUtradepartners(Germany,Netherlands,France,UK,Italy,Belgium)registeredtradesurpluses,while17registeredtradedeficits.

EU exports to the Philippines

increased by 20%.

1.1. Trade in goods: main trends 2012

Trade Relations14

Philippine trade with the EU was below the

average of ASEAN trade with the EU.

EU export to the Philippines: the largest

in a decade

Table 1: Trade in goods between the EU and the Philippines (PHL) Source: Eurostat

EU exports to PHL (€ bn)Annual growth rate (%)EU imports from PHL (€ bn)Annual growth rate (%)Total Trade (€ bn)Annual growth rate (%)EU Trade Balance (€ bn)

20023.4

-28.18.56.2

11.9-6.4-5.2

20033.40.57.1

-16.110.5-11.4-3.8

20043.66.66.9

-3.110.5

0.0-3.3

20053.60.76.5

-5.510.2-3.4-2.9

20063.73.26.5

-1.310.2

0.3-2.7

20074.06.16.0

-6.410.0-1.9-2.1

20083.7

-5.55.8

-3.89.6

-4.5-2.1

20092.9

-21.74.0

-31.26.9

-27.5-1.1

20103.7

27.65.6

40.89.4

35.2-1.9

20114.06.46.4

13.910.410.9-2.4

20124.8

20.45.1

-19.99.9

-4.5-0.3

5

WhereasEU-Philippinestwo-waytradeinservicesdeclinedby2%toatotalvalueof€2.1billionin2011(latestyearforwhichdataisavailable),PhilippineservicesexportstotheEUincreasedby3%to€1.2billionwhileservicesimportsfromtheEUdeclinedby7%to€1billion.ThisisraisingtheservicestradesurplusofthePhilippinesto€224million.

PhilippineservicesexportstotheEUremaindominatedbytransportation(38%shareor€449million;mostlyseatransport),thecategory‘otherbusinessservices’(31%or€367million)–whichincludesBPOs–andtravelservices(15%or€255million).Exportsofinformationtechnology(IT)serviceshavealsobeengrowinginimportance,accountingforsome5%or€55millionin2011.ItshouldbenotedthatthePhilippinesisranked2ndonlytoIndiaasabusinessprocessoffshoringdestination,aggressivelytakingadvantageoftheoutsourcingtrendsoverthepastdecade.Europe(thelargestoffshoringmarketof theworld)stillaccountsfor lessthanatenthofBPOservicesexportsof thePhilippines(USandJapanaccountfor73%and14%respectively).TheexpansioninPhilippineservicesexportstotheEUin2011wassupportedmainlybytherecoveryintravel(+7%growth)aswellasITservices(+36%),andthesustainedgrowthin ‘otherbusinessservices’/BPOs(+3%),whichoffsetthedeclineintransportservices(-3%).

Ontheotherhand,PhilippineservicesimportsfromtheEUaremorediverse.Whilethecategory‘otherbusinessservices’(32%shareor€303million),transportation(22%or€206million)andtravel(15%or€144million)accountforovertwo-thirdsofimports,ITservices(10%or€94million),royalties/licensing(8%or€80million),financial(6%or€56million)andinsuranceservices(5%or€50million)arealsoimportant.

ThedeclineinPhilippineservicesimportsfromtheEUin2011waslargelydrivenbythecontinuedweaknessin‘otherservices’(-22%),insurance(-14%),andITservices(-6%),aswellasthereversalsufferedbytransportservices(-15%).Thesemorethanoffsetthestrongrecoveryintravelservices(+70%).

1.2. Trade in services

Philippines services exports to the EU

expanded by 3% in 2011.

Figure 1: Trade in goods between the EU and The Philippines (PHL) Source: Eurostat

6

In2012thePhilippinesrankedasthe49thEUtradingpartner(downthreeplacesfrom2011),butalsocontinuedtolagbehindotherASEANmiddle-incomecountries.

ThedetailsshowthatthePhilippines’performanceassuppliertotheEUdeclinedfromrank45in2011to48withashareat0.3%inthetotalofEUimportsin2012.

Philippines’exportsperformancetotheEUascomparedtothatofotherASEANcountries,showsthatitcontinuedtofallbehindmostofitsASEANneighbours,withnotablyVietnammanagingtoexporttotheEUmorethanthriceasmuchasthePhilippines.ConcerningEUexportstothePhilippines,therankingslippedoneplacetorank47,butitsshareremainedat0.3%oftotalEUexports,behindmostofitsASEANneighbours.

The Philippines is still among the EU’s top 50

trading partners.

1.3. Rankings: imports, exports and overall trade volume

Figure 2: Trade in services between the EU and the Philippines Source: Eurostat

Table 2: Trade in services between the EU and the Philippines (PHL) Source: Eurostat

EU exports to PHL (€ bn)Annual growth rate (%)EU imports from PHL (€ bn)Annual growth rate (%)Total Trade (€ bn)Annual growth rate (%)EU Trade Balance (€ bn)

20020.5

-24.00.7

-12.31.2

-17.8-0.2

20030.9

76.40.7

-0.61.6

32.80.2

20040.8

-14.70.70.71.4

-8.20.1

20050.9

15.90.8

22.51.7

18.90.1

20060.95.11.1

33.42.0

18.6-0.2

20071.0

10.61.1

-1.32.14.20.0

20081.2

18.61.0

-6.32.25.90.2

20091.1

-7.31.0

-1.62.1

-4.70.1

20101.0

-10.11.1

15.12.21.6

-0.1

20111.0

-7.21.22.92.1

-1.9-0.2

7

Statistics on Philippine trade with the ASEAN may be overstated in so far as Singapore, due to its location and developed deep-sea port facilities, also serves as a re-export hub for trade with other trading partners of the Philippines.

AccordingtoEurostatfigures,thePhilippineshadrecoveredovertheprevioustwoyearslikeotherASEANmiddle-incomecountries,butwastheonlyonethatsufferedadecline(-4%)intradewiththeEUin2012.Withrespecttoexports,allASEANMICssufferedfromdeclines,exceptVietnam(+43%).However,thePhilippinessufferedthelargestdropinexports(-20%)amongASEANMICs.Ontheotherhand,EUexportstoASEANcountriesexpandedbydouble-digits,exceptthosetoVietnam(+3%).Consequently,EUexportstothePhilippines(nowat€4.8billion)havenearlycaughtupwiththosetoVietnam(€5.3billion).

EU-Philippines trade is less than one-half of EU-Indonesia and EU-Vietnam trade, and a third of EU-Thailand and EU-Malaysia trade.

1.4. Comparison of EU-Philippines trade with other main trading partners

Note: This list includes both sovereign states and non-state entities which are outside the statistical territory of the EU, as defined in Regulation 471/2009 of the European Parliament and Council.

Table 3: The EU’s leading trade partners in 2012 Source: Eurostat

8

AccordingtodatafromPhilippineauthorities,theEUremainsthePhilippines’5thlargesttradingpartnerandaccountedfor9%oftotaltradeingoodsin2012.ASEAN(22%),Japan(15%),theUS(13%),andChina(11%)remaininthelead.

The EU is the 5th largest trading partner of the

Philippines.

EU exports (€ bn)EU imports (€ bn)Total Trade (€ bn)EU Trade Balance (€ bn)Cover rate (exports/imports)

Malaysia14.520.334.9-5.8

71%

Thailand14.816.931.7-2.1

88%

Indonesia9.6

15.425.0-5.7

63%

Vietnam5.3

18.523.9

-13.229%

Philippines4.85.19.9

-0.393%

Table 4: EU’s trade with selected ASEAN Member States in 2012 Source: Eurostat

Figure 3: Share of Philippines’ external two-way trade in 2012 Source: Philippines’ National Statistics Office

Figure 4: Philippines’ trade with its main partners Source: Philippines’ National Statistics Office

9

IntermsofPhilippinesexports,theEUremainsthePhilippines’fifthlargestexportmarketaccountingfor11%oftotalPhilippineexports.Asanexportdestination,Japan(19%),ASEAN(19%),theUS(14%)andChina(12%)remaininthelead.

The EU is the Philippines’

5th largest export market.

OnthePHimportside,theEUaccountedfor7.4%oftotalPhilippinemerchandiseimports,holdingthe6thplaceassupplierin2012,asitwasslightlyovertakenbyTaiwan(7.8%share).RemainingintheleadisASEAN(23%),whileJapan(10%)hasalsofallenslightlybehindtheUS(12%)andChina(10%),andtheEUwascloselyfollowedbySouthKorea(7.3%).

The EU is the 6th largest supplier of the

Philippines.

Table 5: Philippines’ (PHL) trade with its main partners in 2012 Source: Philippines’ National Statistics Office

PHL exports ($ bn)Annual growth rate (%)PHL imports ($ bn)Annual growth rate (%)Total Trade ($ bn)Annual growth rate (%)PHL Trade Balance ($ bn)

ASEAN9.8

12.714.1-1.623.9

3.8-4.3

Japan9.9

11.26.4

-1.116.3

6.03.4

USA7.44.17.18.9

14.56.40.3

China6.2

-1.26.79.5

12.84.1

-0.5

EU5.9

-0.44.63.1

10.51.11.3

Figure 5: Philippines’ exports to its main partners Source: Philippines’ National Statistics Office

10

1.5. Philippines’ trade with EU Member States

TheEU’ssinglemarketandthefreemovementofgoodsonthatmarketmakeitdifficulttomakespecifictradeflowsbetweentheEUandnon-EUeconomiesattributabletoanyparticularEUMemberState.

Nonetheless,GermanyappearstobethePhilippines’largesttradingpartnerwithintheEU.GermanyisfollowedbytheNetherlands,France,theUK,ItalyandBelgium.Togetherthesesixcountriesaccountformorethan80%ofEU-Philippinestrade.

Tradeofmostofthe27EUMemberStateswiththePhilippineseithercontinuedtogroworreturnedtopositivegrowthin2012.However11MemberStatessawtheirtradedecline,with14MemberStatesrecordinglowerimportsfromthePhilippinesand7registeringreductionsinexportstothePhilippinesin2012.

Germany, Netherlands, France, UK, Italy and

Belgium account for morethan four-fifths of

EU-Philippines trade.

Most EU Member States’ trade with the Philippines

recorded positive growth in 2012

Figure 6: Philippines’ imports from its main partners Source: Philippines’ National Statistics Office

Figure 7: Trade volume between the EU-27 and the Philippines in 2012 Source: Eurostat

11

Figure 8: Share of EU trade volume with the Philippines in 2012 Source: Eurostat

Table 6: EU Member States’ trade with the Philippines Source: Eurostat

GermanyNetherlandsFranceUnited KingdomItalyBelgiumSpainSwedenFinlandHungaryAustriaDenmarkIrelandCzech Republic PolandBulgariaMaltaSloveniaPortugalRomaniaGreeceSlovakiaLuxembourgLithuaniaCyprusEstoniaLatviaEU27

20111,240

306687312342269194128112

590748164291156623532100

3,978

20121,515

335985370373268273117142

11967682584013

54765234100

4,791

20111,6201,283

3771,716

265239126146

36204109

4325435617

88

181633

943321

6,409

20121,8321,275

328466207163112148

45161

74492547613624191413

7941231

5,128

20112,8591,5891,0642,028

606508319275149209198117106107

8528141423183614

64431

10,387

20123,3471,6101,313

836580431385266186172170124107105101

5029242119121176331

9,919

EU Exports(EUR Mn)

EU Imports(EUR Mn)

Total Trade(EUR Mn)

12

1.6. Structure and trends by product

ThePhilippines seeks to diversify their exports base;while succeeding in reducing the share ofits(dominant)ITsector,itsexportsarestillhighlyconcentratedinthatsector:Theexportsectorisdominatedbyelectronics(48%oftotalexports),whereitislargelyengagedinassemblyandtestingoperationslinkedtoregionalandglobalproductionnetworks.

Electronicsproductsalsoaccountforalarge(37%),albeitdeclining,shareofPhilippinetradewiththeEU.Butitisnoteworthythattradeinothermanufacturedproducts(47%share)aswellasagriculturalproducts(14%share)havebeengrowinginimportance.Infact,agriculturaltraderoseby1%in2012,whiletradeinmanufacturesexpandedby10%.

Manufacturedproductsaccountedfor83%or€4.2billionofPhilippineexportstotheEUin2012,withelectricalandelectronicproducts(includingsemiconductors)accountingfor54%or€2.8billion.Infact,thePhilippinesremainsthe8thlargestsupplierofintegratedcircuitsandelectroniccomponentstotheEU.Otherimportantmanufacturedexportsincludetransportequipment(5%or€272million),garmentsandtextiles(4%or€232million),industrialequipment(3%or€169million)andmetalproducts(1%or€57million).Agriculturalexportshavebeengrowinginimportance,accountingfor14%or€740millionin2012.Thisislargelyduetorisingexportsofcoconutoil(whichnowaccountforabout7%or€354million),fisheryproducts(3%or€135million)andfruitproducts(2%or€125million).ThePhilippinesisinfactthesinglelargestsourceofcoconutoilimportsbytheEU,accountingfornearly60%.

WhileseveralmajorPhilippineexportstotheEUsufferedsetbacksin2012,anumbermanagedtoimprove:Manufacturedexportsgrewby2%,largelyduetoareboundinexportsoftransportequipment(+67%),industrialequipment(+62%),chemicalproducts(+81%),garments(+7%),furniture(+23%),andjewellery(+2%),whileelectronics(-7%),andfootwear(-39%)remainedsofarweak.Exportsoffishproducts(+7%)improvedduringtheyear,whereasitsoverallagriculturalexportsdeclinedby14%,duemainlytoadropinexportsofcoconutoil(-23%)andfruits(-9%).

Electronics account for 37% of Philippine trade with the EU, but agricultural trade

has been growing in importance.

Philippines’ manufactured exportsto the EU was up

2% but agricultural exports declined by 14% in 2012.

Figure 9: Major EU imports from the Philippines Source: Eurostat

13

Althoughmanufacturedproductsalsoaccountedfor84%or€4billionofPhilippineimportsfromtheEUin2012,thestructureismorediversecomparedtomanufacturedexports.Theshareofelectricalandelectronicproducts(includingsemiconductors)hasfallentoaround18%or€868million,althoughthePhilippinesremainsas theEU’s8th largestexportmarket for integratedcircuitsandelectroniccomponents. Importsof transport equipment (20%or€975million), industrial equipment (15%or€736million)andchemicalproducts(14%or€677million),havebeengrowinginimportance.OtherimportantmanufacturedimportsfromtheEUaremetalproducts(4%or€177million)andpaperproducts(3%or€127million).Importsofagriculturalproductshavealsoimprovedandnowaccountforover€616millionor13%ofPhilippineimportsfromtheEU.Thesearelargelyaccountedforbyimportsofalcoholicbeverages(2%or€105million),meat(2%or€100million),animalfeeds(2%or€86million)dairyproducts(2%or€77million),andcereals(1%or€28million).

MostmajorEUexportstothePhilippinesperformedwellin2012.Manufacturedexportsingeneralexpandedby21%,exceedingpre-crisislevels.Exportsofautomotiveproducts(+14%)andindustrialequipment(+37%)continuedtoriseabovepre-crisislevels,whileexportsofelectronics(+1%),chemicalproducts (+12%)andgarments& textiles (+14%)werepickingup,but exportsofmetalproducts(-7%)declined.EUagriculturalexportscontinuedtoexpand(+25%).Exportsofalcoholicbeverages(+168%),andanimalfeeds(+25%)arewellabovepre-crisislevelswhilecerealexports(+1%)wasstable.Exportsofmeat(-6%)anddairy(-4%)fellhowever.

Philippines’ manufactured imports

from the EU were up 21% in 2012

while agricultural imports were up 25%.

Figure 10: Major EU exports to the Philippines Source: Eurostat

14

1.7. EU preferential trade with the Philippines

About72%ofPhilippineexportstotheEUalreadybenefitfromduty-freetreatmentonanMFNbasis.TherestareeligibleinprincipletobenefitfromtheEUGeneralisedSystemofPreferences,withsome16%ofPhilippineexportsactuallybeingabletotakeadvantage.AmongthePhilippines’GSPexportsto theEU,more thanhalfweregrantedduty-free treatment,while the restentered theEUunderreducedduties.Infact,thePhilippinesremainedthe20thlargestuseroftheEUGSPschemein2011(latestyearforwhichdataisavailable).PhilippineGSPexportsaccountforjustover1%oftheEU’stotalGSPimports–lessthanthosefromotherASEANmiddle-incomeeconomies.InfactPhilippines’GSPexportstotheEUarearoundathirdofthoseofVietnamandMalaysiafifthofIndonesiaandasixthofThailand.

The Philippines is the 20th largest user of

the EU GSP scheme.

Table 7: Ranking of the Philippines in EU’s trade in 2012 Source: Eurostat

15

Philippine GSP exports to the EU recovered to pre-

crisis levels in 2011.

ThedetailedpictureshowsthatPhilippinesGSPutilisationisalreadyimproving:Aftersufferinga24%declinein2009,PhilippineGSPexportsgrewby11%to€979millionin2011,abovepre-crisislevels.Nearly40%ofthesewereagriculturalexports.Inparticular,thePhilippines’mainGSPexportstotheEUin2011were:coconutoil(25%),foodproducts(13%),electrical&electronicproducts(12%),steelproducts(8%),rubberproducts(8%),textiles(7%)andopticalproducts(6%).

Theaverageutilisationrateequallyimprovedto63%in2011(from60%in2010).ThePhilippines’utilisationrateiscurrentlyaheadofVietnam(55%)butstillbehindMalaysia(67%),Thailand(69%),andIndonesia(74%).

In2012,theEUadoptedanewGSPscheme,whichwillbeimplementedstartingin2014toallowsufficienttimeforeconomicoperatorstoadapttothenewscheme.Thenewschemewillremainineffectfor10yearstoincreasepredictability,transparencyandstability.UnderthenewEUGSPscheme,thePhilippineswillremainaGSPbeneficiary.SincemanyofitscompetitorswillexitfromGSP,thiswillprovidieadditionalexportopportunitiesforthePhilippines.ThePhilippinesisalsoeligibletoapplyfortheGSP-Plusscheme,whichprovidesadditionalpreferencesbutrequiresimplementationof27coreinternationalconventionsonhumanrights,labourrights,theenvironmentandgoodgovernance.

Figure 11: Philippines’ exports under the EU GSP scheme Source: Eurostat

16

Investment flows and stocks22.1. The EU’s FDI in the Philippines

Foreign direct investment statistics are very difficult to compile in a globalised world, where businesses do not necessarily have clear-cut geographical roots. For this reason, investment statistics must be treated with caution.

TheEU’stotalstockofinvestmentsrosefurtherby1%tosome€7.6billionasof2011(thelatestfullyearforwhichEurostatdataareavailable).Comparativedata(fromtheIMF)indicatethattheEUremainsthelargestinvestmentpartnerofthePhilippines(accountingforabout28%oftotalFDIstock),followedbyJapan(24%),USA(15%),ASEAN(11%),China(7%),andSwitzerland(6%).

The EU is the top investorin the Philippines.

HoweverwhileEUdirectinvestmentflowsintotheASEANregionfurtherincreased,thoseintothePhilippinesfellby29%tosome€0.5billionin2011.

Figure 12: Major sources of FDI stock in the Philippines 2011 Source: International Monetary Fund

Figure 13: Inflows of EU FDI into selected ASEAN Member States Source: Eurostat

17

Figure 14: Stock of EU FDI in selected ASEAN Member States 2011 Source: Eurostat

Overall, thereremainsthereforesubstantialscopeforboostingEU-PHinvestmentrelationsasthePhilippineshadreceivedonly4%ofthe€195billionstockofEUdirect investmentsintheASEANregionasof2011.

2.2. Philippines’ FDI in the EU

EurostatfiguresshowthatthePhilippines’hasfoundinvestmentopportunitiesintheEUastheworld’slargesteconomyandbiggestmarket,havingcumulativelyinvestedsome€1.3billionintheUnionasof2011.

WhilePhilippinesFDI in theEUdecreasedby22%fromthepreviousyear, itnevertheless is theequivalentofaquarterofthe€5.5billion($7.1billion) intotalPhilippines’stockofoverseasdirectinvestmentsasof2011(asestimatedbyPhilippineauthorities).Moreover,thePhilippines’investmentsintheEUremainaheadofThailandandIndonesia,butunderstandablymuchlessthanSingapore’s.

The Philippines has invested some €1.3 billion in the EU

as of 2011.

The Philippines’ FDI in the EU decreased by 22%

in 2011.

Table 8: EU FDI stock with the Philippines (PHL) Source: Eurostat

EU FDI stock in PHL (€ bn)Annual growth rate (%)EU FDI stock from PHL (€ bn)Annual growth rate (%)

20023.7

-21.30.2

65.6

20033.5

-5.60.9

483.0

20043.9

13.81.0

10.7

20054.7

19.01.1

10.7

20065.9

25.01.0

-12.1

20076.02.61.1

10.3

20087.3

22.11.27.9

20096.4

-12.91.5

23.5

20107.5

17.21.7

14.2

20117.61.31.3

-22.5

EU FDI in the Philippines account for only 4% of the

total in ASEAN.

18

Figure 15: Stock of ASEAN Member States’ FDI in the EU, 2011 Source: Eurostat

19

People-to-people exchanges33.1. Migrant Filipinos in the EU and their remittances

Note that data on remittances from the USA may have an upward bias due to the common practice of remittance centers in various cities abroad to course remittances through correspondent banks mostly located in the United States.

ThePhilippinegovernmentestimatestheFilipinodiasporaatsome10.5millionasof2011.Thesearecomposedofover10millionland-basedmigrantFilipinosandnearly370thousandFilipinoseafarers.Nearlyhalfofland-basedmigrantFilipinosarepermanentresidentsoftheirhostcountries,whileabout41%aretemporary/contractworkers.

ThenumberofFilipinosworkingorlivingintheEUhasbeenrisingby23%tosome747,000andtheUnionremainedthe5thamongthelargesthostsof(land-based)migrantFilipinos(accountingfor7.4%)in2011.TheUS(34%),SaudiArabia(15%)andCanada(8.4%)remaininthelead.Ontheotherhand,whileASEAN(8%)overtooktheEU,theUAE(6.7%)hasfallenbehind.Abouthalfofthese(land-based)FilipinosintheEUarepermanentresidents,andaboutathirdaretemporaryworkers.MigrantFilipinoshaveapresenceinallEUMemberStates,butaremostnumerousintheUK(29%oftheEUtotal),Italy(25%),Germany(8%),Greece(7%),Spain(7%),andFrance(7%).

The EU is the 5th largest host of (land-based) migrant

Filipinos.

WiththeEUhavingtheworld’slargestmerchantfleet,accountingfor35%oftheworldtotal,theEUisalsoprobablythelargestemployerofFilipinoseafarers.Thus,some130,000ormorethanathirdofFilipinoseafarersprobablyworkonEUships.

Figure 16: Major hosts of land-based overseas Filipinos, 2011 Source: Eurostat

Figure 17: Major sources of remittances from overseas Filipinos Source: Bangko Sentral ng Pilipinas

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TheEUmaintaineditspositionasthesecondlargestsourceofforeignexchangeremittancesintothePhilippines(accountingfor14%in2012),nextonlytotheUS(43%share).In2012,remittancesfromtheEUdeclinedby1%to$2.8billion(€2billion).TwothirdsofremittancesfromtheEUweresentbyland-basedworkerswhiletherestcamefromsea-basedworkers.Remittancesfromland-basedworkersdroppedby7%,whileseafarer’sremittancesacceleratedtoanearly13%growth.

TourismisasectorofgrowingeconomicimportanceforthePhilippinesandin2012,despitetheglobaleconomiccrisis,thePhilippinesmanagedtoattractmoretourists,whichreachedarecord4million,up9%fromthepreviousyear.Moreover,despitetheterminationofthelastdirectflightsfromEurope(byAirFrance-KLM),thenumberofEUtouristsvisitingthePhilippinesincreasedfasterat10%,reachingover349,000.

AsasourceoftouriststheEUremainsonthe5thplace,accountingfor8.6%ofthetotalnumberofvisitors,justbehindtheASEAN(9.2%share),butstillaheadofChina(6%orrank6).SouthKoreahasthehighestshareintourists(25%),followedbytheUS(16%)andJapan(10%orrank3).

The EU is the 5th largest sourceof tourists to the

Philippines.

3.2. EU tourists to the Philippines

The EU remains the 2nd largest source of remittances

into the Philippines.

Figure 18: Major sources of tourists to the Philippines Source: Philippine Department of Tourism