The Philippines is eager for a free trade agreement with the US. The hope is that this will provide preferential treatment and better market access for the country’s export items.

In the meantime Philippines is maximizing its trade privilege with the US under the Generalized System of Preferences. The GSP allows the Philippines to export a total of 5,057 products, or nearly half of the 10,600 US tariff lines, to the US at zero or reduced tariffs. However, the Philippines could lose this preferential treatment once it has been classified as an upper middle-income economy by the World Bank. The government is targeting to develop the Philippines into an upper middle-income economy by 2022. Therefore, the country could lose its GSP status that year.

Trade in goods between the Philippines and the US last year improved 7.16 percent. This makes the US the country’s third-largest trading partner next to China and Japan. Further, exports to the US grew 10.04 per cent, making it the country’s top export destination. Electronic products account for bulk of shipments. Aside from this, top exports to the United States include manufactured items, apparel and clothing, ignition wiring sets, machinery and transport equipment and coconut oil.