Bilateral trade between France and the Philippines: A current overview and future prospects
An overview of France-Philippines bilateral trade in 2022
In 2021, the volume of Franco-Philippine trade picked up (+35.2%) with the revival of aeronautical deliveries. The year 2022 saw a return to trade volumes close to pre-pandemic levels (2.225 million euros), but a deterioration in France’s trade balance with the Philippines (345 million euros), mainly attributable to the strength of Philippine exports of electronic components (+63.4%).
1. The trade volume returns to its pre-pandemic level, but the French trade balance deficit is increasing (345 million euros).
The year 2022 was marked by an increase in the volume of Franco-Philippine trade by 29.4%, to reach 2.225 million euros. The volume of trade therefore returned to its pre-pandemic level (2.226 million euros in 2019), after a sharp contraction in trade in 2020 (-42.9%) and a modest recovery in 2021 (+35.2%).
However, France’s trade balance deficit with the Philippines is widening, reaching 345 million euros in 2022, an annual increase of 91.7%. This growing imbalance in the trade balance is linked to the strength of French imports from the Philippines, which reach a historic record of 1.285 million euros (+35.2%) in 2022. At the same time, our exports to the Philippines have increased by 22.1%, to reach 940 million euros in 2022.
Franco-Philippine trade does not escape the dependence of French foreign trade on the aeronautics sector, which represents 30.8% of our total exports to the Philippines in 2022 (32.2% on average over the last 5 years, despite an empty year in 2020). Excluding aeronautical equipment, our trade balance with the Philippines remains structurally in deficit, reaching -649 million euros in 2022, a deterioration of +48.5%.
The development of the domestic airline sector provides an environment conducive to filling the order book of the French airline industry. Airbus has established itself as the main supplier to the two largest Philippine airlines. Of the 46 aircraft in service in the Philippine Airlines (PAL) fleet, there are 37 Airbus and 9 Boeing. PAL also plans to sign a sales agreement in June 2023 for 9 new A350-1000s. The Cebu Pacific Airlines fleet has 67 active aircraft, all Airbus (or ATR).
The archipelago ranks 5th customer and 7th supplier to France in ASEAN. On a global scale, the Philippines represents only 0.16% of our total exports, and 0.17% of our imports. We are the Philippines’ 3rd European customer behind the Netherlands (“Rotterdam” effect) and Germany, and its 2nd European supplier behind Germany.
2. Aeronautics and pharmaceutical and agri-food products remain among the main French export sectors
In 2022, our exports of goods to the Philippines reached 940 million euros, an increase of 22.1% and a return to a volume close to the pre-pandemic situation (942 million euros on average between 2015 and 2019). The growth in exports is mainly attributable to the progression of the main export items.
Air and space navigation equipment retains its traditional place as the leading export item, i.e. 304 million euros (i.e. +30.9% compared to 2021), including 97.1% for aircraft exports.
Exports of pharmaceutical products increased by 31.4%, reaching 133 millionneuros. They constitute the second largest export item, accounting for 14.1% of total exports. These exports are mainly composed of medicines (57.0%), and vaccines and other immunological products (42.8%).
The products of the agri-food industry rank among the main export items. These exports are dominated by meat and meat-based products (110 million euros or +37.0% compared to 2021), made up of 97.5% pork and its derivatives (offal, fat). Dairy products occupy the second position of agri-food exports (43 million euros or +8.2%), and are mainly composed of milk and milk cream (37.0%) and whey (36.2%).
3. Our imports remain dominated by electronic and IT products
In 2022, French imports of goods from the Philippines increased by 35.2%, to reach 1.285 million euros. This increase is mainly linked to the growth in imports of electronic components and cards, which represent 20.9% of the increase.
Imports of electronic and IT products remain predominant, particularly for electronic components and cards (415 million euros in 2022, or +63.4% compared to 2021) which alone represent 32.3% of our imports. French imports from the Philippines also focus on household appliances (166 million euros, +41.1%) and computers and peripheral equipment (93 million euros, +8.3%).