RESTRICTEDWORLD TRADE
ORGANIZATIONWT/TPR/G/59
27 August 1999
(99-3560)
Trade Policy Review Body Original: English
TRADE POLICY REVIEW
THE PHILIPPINES
Report by the Government
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism
(Annex 3 of the Marrakesh Agreement Establishing the World Trade
Organization), the policy statement by the Government of the Philippines is
attached.
Note: This report is subject to restricted circulation and press embargo until the end of the meeting
of the Trade Policy Review Body on the Philippines.The Philippines WT/TPR/G/59
Page 3
CONTENTS
Page
I. ECONOMIC PERFORMANCE 5
(1) O VERALL 5
(2) S ECTORAL 5
(3) E XTERNAL TRADE 6
II. MAJOR DEVELOPMENTS IN TRADE AND RELATED ECONOMIC POLICY 6
(1) P HILIPPINE ACCESSION TO THE WORLD TRADE ORGANIZATION 7
(2) A CTIVE PARTICIPATION IN REGIONAL TRADING ARRANGEMENTS 7
(3) C ONTINUING TARIFF REFORM PROGRAMME 7
(4) E STABLISHMENT OF A NEW CENTRAL BANK 8
III. COMMITMENTS UNDER THE MULTILATERAL TRADING SYSTEM 9
(1) T ARIFFS 9
(2) A GRICULTURE 9
(3) T EXTILES AND CLOTHING 9
(4) S ERVICES 9
(5) R ULES AND DISCIPLINES 10
(i) Trade measures against unfair trade - anti-dumping and countervailing
duties 10
(ii) Trade measures under fair trade conditions 10(iii) Balance-of-payments measures 11(iv) Non-tariff barriers 11
(v) Rules of origin 11
(vi) Preshipment inspection 11(vii) Customs valuation 11(viii) Trade-related investment measures 11(ix) Intellectual property rights 12
IV. FUTURE DIRECTIONS 12
(1) I
MPLEMENTATION AND THE BUILT-IN AGENDA 12
(2) N EW ISSUES 12
(i) Trade and the environment 12(ii) Trade and investments, trade and competition policy, and transparency in
government procurement 13
(iii) Global electronic commerce 13
(iv) Labour standards 13(v) New Round of MTN 13The Philippines WT/TPR/G/59
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I. ECONOMIC PERFORMANCE
(1) OVERALL
1. At about the time of the 1993 Trade Policy Review (TPR), the Philippine economy was
recovering from a string of major natural calamities including a devastating earthquake and the
catastrophic eruption of Mount Pinatubo .  The economy was in stagnation caused largely by
unsustainable  deficits in the government budget and the current account of the balance of payments(BOP).  Huge financial requirements of post-disas ter rehabilitation work exacerbated the situation.
2. Nonetheless, the adoption of important financial and monetary measures helped promote
greater economic stability, while the progress achieved in addressing structural bottlenecks and in
encouraging a more open economy improved the prospects for more rapid growth being sustained in
the long-run. Inflation has since been contained at single digit and domestic interest rates softened.Real Gross National Product (GNP), which grew at 2.1% in 1993 was bolstered largely by higher real
investments and strong foreign demand.  A more liberal foreign exchange  regime, combined with
market-based foreign exchange policy, improved the capability of the economy to respond more
quickly to foreign demand and pulled in foreign capital.  In the light of this deregulated atmosphere,
the level of international reserves were kept at a comfortable level during that year and the pesoexhibited improved international competitiveness.
3. Gathering strength, GNP growth steadily increased to 5.3% by 1997 during which the
incipient financial crisis affecting Asia, and subsequently the world, was creeping into the Philippine
economy as well.  In 1998, the economy slowed down to  a negligible 0.1% GNP growth with gross
domestic product (GDP) also posting a slight decline of 0.5%.
Table 1
Selected Macroeconomic Indicators
1993 1994 1995 1996 1997 1998
Real GNP (growth rate in %) 2.1 5.3 5.0 7.2 5.3 0.1
Real GDP (growth rate in %) 2.1 4.4 4.8 5.8 5.2 -0.5
Source : National Statistics Coordination Board;  National Economic Development Authority.
(2) SECTORAL
4. For the period 1993 to 1998, growth in the Philip pine economy was largely attributed to the
services sector which accounted for a 43% share of GDP in 1993 in value-added terms, and 45.1% in
1998.  The services sector was the slowest in 1993 with a growth rate of 2.5% and the fastest in 1996
by 6.4%.  In 1998, the services sector grew by 3.5%.
5. Industry accounted for the next largest share of GDP with 34.2% in 1993 and 35.5% in 1998.
In terms of growth, the industrial sector peaked in 1995-1996 and markedly decelerated by 1998.
6. The share of the agricultural sector has declined from 22.8% in 1993 to 19.4 in 1998, despite
the fact that more than 40% of the Philippine lab our force is in the sector, owing to its relatively
poorer performance.  In 1998, due to a combination of factors including adverse climatic conditions(El Niño), the agricultural sector contracted by 6.6%.WT/TPR/G/59 Trade Policy Review
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Table 2
Sectoral Growth Rates and Share of GDP
(Percent)
1993 1994 1995 1996 1997 1998
Agriculture
Growth rate 2.1 2.6 0.9 3.8 2.9 -6.6
Share 22.8 22.4 21.5 21.0 20.7 19.4
Industry
Growth rate 1.6 5.8 7.0 6.2 6.1 -1.7
Share 34.2 34.7 35.4 35.6 35.9 35.5
Services
Growth rate 2.54 4.2 5.0 6.4 5.5 3.5
Share 3.0 42.9 43.0 43.3 43.4 45.1
Source : National Statistics Coordination Board;  National Economic Development Authority.
(3) EXTERNAL TRADE
7. For the period 1993 to 1998, the country’s liberalization programme, and active involvement
in international and regional trading arrangements, underpinned the growth in the export sector.
During this period exports of goods and services grew by an average of 14.2%.  Although exports ofgoods registered a negative rate in 1998 at 0.3%, in real terms (using 1985 as base prices),
merchandise exports continued to grow at 16.9% for that year in current dollar terms.  Exports are
dominated by semiconductors and other products of the electronic industry, which in 1998 accounted
for around 67% of total exports.
8. On the other hand, import growth was lower at around 10% average from 1993 to 1998, with
1998 registering an all-time decline of 14.3% owin g to the financial crisis, and the resulting
depreciation of the Philippine peso by around 39%.   The bulk of imports is comprised of fuel, raw
materials, intermediate goods and capital equipment.
Table 3
Trade Performance
(Growth rate in percent)
1993 1994 1995 1996 1997 1998
Total exports of goods and services 6.2 19.8 12.0 15.4 17.5 14.3
Merchandise exports 7.9 15.2 16.2 9.3 13.5 -0.3
(Merchandise exports in current terms) 15.8 18.5 29.4 17.7 22.8 16.9
Total imports of goods and services 11.5 14.5 16.0 16.7 14.4 -14.3
Merchandise imports 10.8 14.9 15.9 16.6 7.8 -15.3
(Merchandise imports in current terms) 21.2 21.2 23.7 20.8 14.0 18.8
Source : National Statistics Coordination Board;  National Economic Development Authority.
II. MAJOR DEVELOPMENTS IN TRADE AND RELATED ECONOMIC POLICY
9. Since the last Trade Policy Review in 1993, the Philippine Government has pursued trade and
related economic reforms.  The present report highlights four specific policy areas that have
pronounced effects on the country’s international trade practices.The Philippines WT/TPR/G/59
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(1) PHILIPPINE ACCESSION TO THE WORLD TRADE ORGANIZATION
10. In December 1994, the Philippine Senate ratified the “ Marrakesh Agreement Establishing the
World Trade Organization”.   Thus, the Philippines became a founding Member of the WTO as the
Agreement entered  into force on 1 January 1995.  The event signaled a conscious policy decision on
the part of the Philippine Government to pursue further trade liberalization and embodied a firm
policy objective of  becoming more closely integrated with the multilateral trading system (MTS).
11. Philippine priorities in the WTO are as follows:
(a) Market Access - the full and faithful  implementation of commitments in
areas such as industrial tariffs, agriculture, textiles and clothing, and services;
(b) Rules and Disciplines - the proper use of WTO rules and disciplines
including measures against unfair trade such as anti-dumping and
countervailing duties,  safeguard measures under fair trade conditions,
customs valuation, subsidies, intellectual property rights;  and
(c) Institutional Topics - faithful and timely enforcement of the decisions and
recommendations under the dispute settlement mechanism and improving
and strengthening the multilateral trading system through the Trade PolicyReview mechanism.
(2) A
CTIVE PARTICIPATION IN REGIONAL TRADING ARRANGEMENTS
12. The Philippines is a founding and active member of the ASEAN and plays an important role
in the realization of the ASEAN Free Trade Area (AFTA).  Launched in 1993, the timetable for
AFTA was originally set for 15 years ending in the year 2008.  In 1994, an agreement was reached to
shorten the time frame for implementation within 10 years or until the year 2003.   Very recently in
1998, ASEAN announced bold measures to even shorten the duration of AFTA by completing theprocess in the year 2002.
13. On a much wider regional front, the Philippines also actively participates in the Asia-Pacific
Economic Cooperation (APEC) forum, supporting the objective of building on the open multilateral
trading system espoused under the WTO.  APEC members agreed after the conclusion of the Uruguay
Round (UR) in 1994 to carry out all commitments fully and without delay.  In various events sincethen, APEC has affirmed its goal for the full and effective implementation of the UR outcomes within
the agreed time frames in a manner fully consistent with the letter and spirit of the WTO.
(3) C
ONTINUING TARIFF REFORM PROGRAMME
14. The year 1993 marked the midpoint of the implementation of Executive Order No. 470, or the
Tariff Reform Programme (TRP), for 1991-1995 undertaken by the Philippine Government as part ofits overall economic reform package.  Nearly 90% of the total number of tariff lines were dutiable at
either duty free, 10%, 20%, 30%, 40% or 50% in the 1993 TRP Schedule.  Those dutiable at 10%
represented almost 35% of all tariff lines.  The minimum tariff rate was 0% with the highest at 80%,
and the overall average nominal tariff was 23.50%.
15. By 1995, the Philippine Government issued Executive Order (E.O.) No. 264 ushering in the
third TRP.  The E.O. envisioned ending tariff rates of 3% and 10% by 1 January 2003, adjusting to a
uniform 5% tariff rate starting 1 January 2004.  By the end of 1995, the minimum tariff was at 3%
imposed on 35% of all tariff lines.  Another 62% of tariff lines had duties of either 10%, 20% or 30%.WT/TPR/G/59 Trade Policy Review
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Tariff lines with duties above 30% (ie., 35%, 40%, 45% and 50%) comprised less than 3% of the total
number of tariff lines. Since then, the Philippines has continued to aggressively pursue the TRP
issuing more comprehensive tariff adjustments un der E.O. 465 which took effect in January 1998, and
E.O. 486 (effective July 1998).
16. In 1999, E.O. 63 was implemented mainly in response to the current economic crisis, with the
upward tariff adjustments primarily intended to alleviate the difficulties faced by domestic industries,arising from the financial crisis, and to provide temporary import relief to industries adversely
affected by the crisis, and address the surge in low-priced imports from sources which experienced
significant currency depreciation.  It covers a total number of 720 tariff  lines consisting of textile and
garment products, petrochemicals, and iron and steel products.  The applied tariffs on 694 tariff lines,
for chemicals, textiles, metals and machinery, were raised to levels at or below those bound in theWTO.  It should be noted, however, that the upward tariff adjustments are temporary and limited to
the remainder of 1999, after which they will revert  to their former rates.  Furthermore, E.O. 63
reduced the tariffs on three tariff lines while maintaining present rates on 14 tariff lines which were
scheduled for reductions.
17. The average nominal tariff is currently estimated at approximately 10% for 1999 and at 8% in
the year 2000.  More than half of the total number of tariff lines, which presently number 5,638, is
dutiable at 3% in 1999.  Another 31% of tariff lines have tariffs of either 10% or 20%.  The minimum
tariff is 0% and the maximum at 65%.
18. The Philippine Government plans to continue with its TRP until a uniform tariff rate of 5% on
all products (except sensitive agricultural products), or at least a narrow range of 0% - 5%, is achieved
in 2004.
(4) E
STABLISHMENT OF A NEW CENTRAL BANK
19. In 1993 the new Bangko Sentral ng Pilipinas (BSP) was established with the primary
objective of maintaining price stability conducive to a balanced and sustainable growth of the
economy.  The fiscal and administrative autonomy of the BSP provided the monetary authorities
adequate flexibility to pursue its objective of price stability. Likewise, the BSP was established with
the objective of maintaining a central monetary authority which functions and operates as anindependent and accountable corporate body with mandated responsibilities concerning money,
banking and credit.
20. The bold reforms to deregulate the country’s foreign exchange (forex), trade, and payment
systems were started by the former Central Bank of the Philippines (CBP) in 1992.  Among the
reforms pursued by the CBP and its successor, BSP, was the lifting of forex restrictions on currenttransactions.  Under the liberalized current account environment, the mandatory surrender
requirement on all forex receipts and on inward remittance of all forex receipts from exporters were
removed.  On the other hand, limits on the allowable amount of forex purchases by residents, to
facilitate payments for services, were liberalized substantially.  The liberalization process of the forex
regime was continued by the BSP.  At the same time, the BSP liberalized selected transactions in thecapital account of the balance of payments.  In particular, the rules applied to local banks on forex
lending were relaxed to facilitate exporters’ access to foreign currency loans.  A liberalized market on
the entry and operation of foreign banks was put in place following the passage of RA 7721 on
15 May 1994.
21. At the outbreak of the currency crisis in July 1997, the monetary authorities decided to allow
the peso to float freely as the effectivenes s of the intensified dollar sales diminished.The Philippines WT/TPR/G/59
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III. COMMITMENTS UNDER THE MULTILATERAL TRADING SYSTEM
22. The Philippines subscribes to the full and faithful implementation of its UR commitments
within the agreed timeframes.
(1) TARIFFS
23. As a result of the Uruguay Round, the Philippines bound tariffs in the WTO on some 2,800
industrial tariff lines and 744 agricultural tariff lines.  In terms of scope, these represent around 63%of total tariff lines, with all agricultural tariffs being bound.
(2) A
GRICULTURE
24. In addition to the tariff bindings, the Philippines sought to remove all existing quantitative
restrictions, such as import quotas, or prohibitions imposed on agricultural imports,  except rice, and
to convert all these restrictions to equivalent tariffs under the process now referred to as tariffication.
The bound rates are also to be reduced by 24% over a period of 10 years.
25. In 1996, the Philippine Government enacted Republic Act (R.A.) No. 8178 which authorized
the replacement of all quantitative restrictions on agricultural products with tariffs.  The only
exception from the coverage is rice for which the Philippines sought flexibilities allowed in Annex 5
of the Agreement on Agriculture.
(3) TEXTILES AND CLOTHING
26. Philippine exports of garments and textile products are subject to quantitative restrictions
imposed by developed countries under the Multi-Fibre Arrangement (MFA).  With the entry into
force of the WTO Agreement, the commitment to phase-out the MFA, and to integrate the sector
under the rules and disciplines of the multilatera l trading system, the Philippines had anticipated
favourable trading conditions for its major garments and textile exports.  Halfway through the
implementation, however, the Philippines, as other developing countries, is experiencing frustrationover the slow phase of the integration into the multilateral trading system.  The developed countries
have chosen mainly to delay the removal from the coverage of the MFA, quotas of products of major
interest to developing countries.
27. Moreover one major trading partner has chosen to implement rules of origin, effectively
requiring that the Philippines produce its own yarns and textiles to qualify for MFA quotas.  This hasresulted in unwarranted uncertainty in the trad ing environment, as annual bilateral consultations
between the Philippines and that major trading partner, to address the adverse effects of the
unilaterally announced rules of origin, has instead become opportunities to raise trade and other issues
against the Philippines.
28. The importance of the full and faithful im plementation of the Uruguay Round commitments
thus comes to the fore, particularly in the  case of the textiles and clothing sector.  In the meantime,
Philippine exports of garments continue to falte r midway into the implementation of the Agreement
on Textiles and Clothing, suffering a decline, for example, from US$2.89 billion in 1997 to
US$2.77 billion in 1998, or about 4.14%.
(4) S
ERVICES
29. The Philippines offered as its initial comm itments in the Uruguay Round to bind or to
maintain all its current regulations on market access, with respect to the financial sector (commercialWT/TPR/G/59 Trade Policy Review
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banking, securities and services);  telecommunications (courier service and value added
telecommunications);  transport (maritime, road, rail  and air transport and auxiliary services to the
modes of transport); and tourism.
30. In the area of commercial presence, the Phil ippines committed to maintain foreign-equity
participation of 40% at the minimum, to comply with the requirements of the Philippine Constitution.
The Philippines, however, maintained the requirements where the Constitution allowed as much as100% foreign equity.
31. In 1994, the Philippines passed R.A. 7721 liberalizing the entry and scope of operations of
foreign banks in the country.  This allowed the co untry to improve on the actual implementation of its
initial commitments in the financial services sector in 1995 and 1997.  To date the number of
branches of foreign banks operating in the countr y has grown from four (4) to fourteen (14).
Likewise, another four (4) foreign banks were allowed to put up subsidiaries and/or purchase up to
60% of the voting stock of existing banks.  The passing of RA 7721 which reinforced the 1992
liberalization of bank branching policy resulted, not only in a dramatic rise in resources, but also in
the widening of the operating network of the financial system.  From 7,486 in 1990, the number of
financial institutions increased to 18,530 in March this year.  Of  this total number, bankinginstitutions accounted for 41% or 7, 663 comprising  999 head offices and 6,664 branches.
32. In the area of telecommunications, the Philippines enacted R.A. 7925 in 1995.  The law
provides for the fostering of a healthy competitive environment where telecommunication carriers are
free to make business decisions, and to interact with one another in providing telecommunications
services, with the end view of encouraging financ ial viability of the carriers while maintaining
affordable rates for the consuming public.
(5) R
ULES AND DISCIPLINES
(i) Trade measures against unfair trade - anti-dumping and countervailing duties
33. The Philippine legislation on anti-dumping is embodied in R.A. 7843 which Congress passed
in December 1994 and which took effect the following year.
34. Section 302 of the Tariffs and Customs Code of the Philippines provides for countervailing
duties to correct the injurious effects of subsidized imports.  Section 302, which is based on the GATTCode on Subsidies and Countervailing Duties, is mainly consistent with the provisions of the WTO
Agreement on Subsidies and Countervailing Measures.  There is, however, an initiative in Congress to
pass a law that would provide sufficient detail for the filing of petitions, the conduct of countervail
investigations, and other conditions when imposing countervailing duties fully consistent with the
substantive and procedural requirements of the WTO.
(ii) Trade measures under fair trade conditions
35. With the current economic crisis, calls have grown stronger for import-relief measures from
adversely affected sectors.  The Executive deems it best to have Congress enact a law that would
provide domestic industries with import relief, to address injurious surges in imports brought about by
obligations, including tariff concessions, under the WTO, and other regional trading arrangements, aswell as unforeseen developments like the financia l crisis.  In this regard a joint executive and
legislative technical working group is currently drafting a safeguards law consistent with the
requirements of the WTO.  Likewise, domestic legislation is being drafted to provide special
safeguards in agriculture for the duration of the reform process, as envisaged in the Agreement on
Agriculture.The Philippines WT/TPR/G/59
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36. The Philippine Government is convinced that while it is fully committed to liberalization of
international trade, the flexibility allowed by safeguard measures for industries seriously affected by
such a process should always be made available.  In doing so, government assistance in the form of
WTO-consistent, and time-bound import relief measures, will be available when needed, provided
that domestic industries are willing to undertake structural adjustment over the timeframe of the
safeguard measures, and demonstrate economic viability over the longer term.
(iii) Balance-of-payments measures
37. In 1995, subject to the full liberalization of import restrictions justified under the BOP
provisions, the Philippines disinvoked GATT Article XVIII:B.  To date, the Philippine Government
has deregulated all the covered sectors with remaining restrictions taken only on account of health,
safety, and security reasons as provided under Article XX and XXI of GATT 1994.
(iv) Non-tariff barriers
38. The Philippines subscribes to the requirements under the Agreements on Technical Barriers to
Trade, Sanitary and Phytosanitary Measures and Import licensing.  The Philippines believes that
measures under these Agreements should not be taken to impose unnecessary barriers to trade.
Moreover, that they are applied in a non-discriminatory manner, based on scientific evidence whereapplicable, properly notified, and provide for adequate consultations undertaken preferably prior to
their implementation.
(v) Rules of origin
39. The Philippines has actively participated in the ongoing harmonization work, and has done so
in order to advance and complete the process.  The Philippine Government deplores the introduction
by its major trading partner of new rules of origin applied to imports of textiles and clothing, which
adversely affect market access for garments and textile exports.  Such rules effectively deprive anycountry manufacturing garments and textile products from imported yarns and textiles, of origin,
thereby creating a trading environment filled with uncertainty and unrealized development goals.
(vi) Preshipment inspection
40. The Philippines adheres to the WTO Agreement on Preshipment Inspection and has
proceeded in implementing this agreement, with the objective of ensuring that preshipmentrequirements and procedures contribute to trade facilitation.
(vii) Customs valuation
41. Pursuant to its commitment under the WTO, the Philippine Government enacted R.A. 8181
authorizing the shift from  Home Consumption Value  to Transaction Value  by the year 2000.  In the
interim period the Philippines has opted to make use of the modified Brussels Definition of Value
based on the export value.  Currently efforts are being undertaken to enable the country to implement
the shift to the transaction value method, by the year 2000, as scheduled.  These include amendments
to further improve the WTO-consistency of R.A. 8181 together with the administrative restructuring
of the Bureau of Customs.
(viii) Trade-related investment measures
42. The Philippines notified existing trade-related investment measures (TRIMs) in the
automotive and the coconut-based chemical sector.  The Philippines grants certain incentivesWT/TPR/G/59 Trade Policy Review
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contingent on local content and foreign-exchan ge requirements for its Car, Commercial, and
Motorcycle Vehicle Development Programmes (CDP/CVDP/MDP).  On the other hand under
E.O. 259, local-content requirements exist in the soap and detergents industry,  making use of
coconut-based chemicals, for reasons of protecting the environment. The Philippine Government is
committed to full conformity with the TRIMs Agreement by the year 2000.
(ix) Intellectual property rights
43. The Philippines enacted R.A. 8293 in 1997 which took  effect in June 1998.  The law
provides for substantial compliance, on the part of  the Philippine Government, with respect to its
commitments under the TRIPs Agreement.  It also created the Intellectual Property Office under the
Department of Trade and Industry to ensure such compliance.  Current efforts are directed to
completing legislation on the protection of layout designs for integrated circuits and plant varieties.
IV. FUTURE DIRECTIONS
44. The Philippines is of the view that the WTO,  in pursuing a forward-looking agenda, should
also be sensitive to the trade, finance, and development needs of developing countries.  Moreover, the
WTO should keep within subject matters that are not only directly trade-related, but more
importantly, to issues for which it has competence.
(1) IMPLEMENTATION AND THE BUILT -IN AGENDA
45. The Philippines accords the highest importance to  the full and faithful implementation of the
WTO Agreements signed in Marrakech.  There has been adequate experience in the implementation
of these Agreements, and this will be valuable in assessing the future agenda of the WTO.
46. It is with a sense of urgency that the Philippines views the need to push ahead with the work
that must be done under the built-in agenda.  Of particular importance to the Philippines are the
scheduled negotiations in agriculture and services that will commence in the year 2000.  For theagriculture negotiations, the Philippines would like to see a better balance between commitments on
export subsidies and trade-distorting domestic support vis-à-vis commitments on border measures.
The Philippines also notes the unfinished negotiations in maritime services and rules of origin.  In the
area of services, the Philippines will also continue to actively participate in the negotiations on
government procurement, subsidies and safeguards and other GATT Rules, noting that negotiationson such rules should have already been concluded by  now, and reaffirming that these must not be the
subject matter of any future multilateral trade negotiations;  as well as negotiations with respect to
geographical indications for wines and spirits under the TRIPs Agreement;  and other reviews
mandated by the WTO Agreement including that in the Agreement on Subsidies and Countervailing
Measures in respect of Article 31.
(2) N
EW ISSUES
(i) Trade and the environment
47. The Philippines finds the interface of trade and environment challenging because both involve
legitimate interests that are inscribed, on the one hand, in WTO rules, and on the other, the
multilateral environment agreements (MEAs).  As the WTO continues with the examination of the
relationship between the two, the Philippines attaches particular importance to the potential benefits
of removing trade-restricting and distorting measures, because these will be more effective in
achieving a more open and non-discriminatory international trading system that can provide  concrete
opportunities for countries to uplift their standards of living.  While it is certainly important that tradeThe Philippines WT/TPR/G/59
Page 13
and development policies give full recognition to the protection of the environment, the preservation
of the principles and disciplines of the multilateral trading system remains paramount.
(ii) Trade and investments, trade and competition policy, and transparency in government
procurement
48. The Philippines notes that very good work has transpired in the Working Groups dealing with
investment and competition policy, and underscores the importance of conducting such work withoutprejudice to any future activity the Members might, or might not, find necessary.
49. In the area of transparency in government procurement, the Philippines maintains that work
should be confined only to issues of transparency and not to market access and other elements that
will circumscribe the flexib ility of governments to utilize procurement as an effective instrument in
achieving social, economic, and development objectives.
(iii) Global electronic commerce
50. Notwithstanding the stand-alone agreement reached at the 2nd Session of the Ministerial
Conference in May 1998, the Philippines would also  prefer that the relationship between global
electronic commerce (GEC) and the multilateral trading system be studied further, prior to any
initiative towards rule-making in the WTO.
(iv) Labour standards
51. The Philippines continues to view with utmost c oncern any, and all, attempts to include social
issues, including core labour standards in the agenda of the WTO.  Efforts to link trade and such other
issues will inadvertently and irreversibly give rise to protectionist tools in the guise of the pursuit of
legitimate social goals.  The Philippines reiterates the declaration in Singapore that core labour
standards are not within the purview of the WTO, but rather of the International Labour Organization
(ILO).
(v) New Round of MTN
52. The decision on whether to launch a New Round of multilateral trade negotiations should be
left to the Ministers at their 3rd Session scheduled in Seattle at the latter part of the year.  Any such
decision should be made in the tradition of consensus, that has been the hallmark of the GATT then,
the WTO now, and on the condition that issues included in the agenda of any new round should be ofmutual interest to all WTO Members.  While the Philippines adheres to a forward-looking agenda in
the WTO, the agenda for any new round must clearly be within the competence of the WTO and
should result in a balance and mutuality between the interests of all Members.
__________