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The European Commission struck a trade agreement with the Philippines on Tuesday, stepping up its diversification strategy across the Indo-Pacific region.
The deal comes more than a year after the US introduced sweeping new tariffs on many of its trading partners, prompting retaliatory measures and adding to global trade tensions.
Since then, the EU has been seeking new trade ties, recently concluding major deals with India, Australia and Indonesia.
“This agreement sends a clear signal that the EU is reinforcing its engagement with the Indo-Pacific,” EU Trade Commissioner Maroš Šefčovič said on Tuesday.
“Half of global consumers are covered by European Free trade agreements. Nobody else has this advantage.”
“Squeeze on supply chains”
The new agreement will give EU businesses access to a market of 113 million people, and remove over 94% of customs duties. It will cover more than 97% of bilateral trade, including EU exports of machinery, medicines and medical appliances, as well as agri-products such as meat, pork, poultry and spirits.
Exports from the Philippines are dominated by semiconductors, integrated circuits and industrial machinery.
The deal should also facilitate EU investment in raw materials in the Philippines, as the EU seeks to move away from China, which holds a monopoly on key raw materials.
Bilateral trade in goods between the EU and the Philippines was €17.6 billion in 2025, while trade in services reached €10.3 billion in 2024. The stock of EU foreign direct investment in the Philippines amounted to €15.4 billion.
Šefčovič also said there was a “mutual interest” with countries in the wider Indo-Pacific area “to address the current global turbulence” and “the squeeze on the supply chains.”
Brussels says China has weaponised critical products for EU industry such as chips and rare earths in 2025, jeopardising whole sectors such as the car industry.
The Commissioner added that trade deals with Thailand and Malaysia were next on the EU agenda, with an agreement with Bangkok foreseen by the end of the year.
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