Date Published:
Dec 07, 2020
Focus Area(s):
DP 2020-25

This research aims to understand the relationship between preferential margin and Free Trade Agreement (FTA) utilization rates in the case of the Philippines. It uses an empirical model to estimate this relationship using an FTA import ratio as a variable for utilization and the difference between most-favored-nation (MFN) and FTA tariff rates as a variable for margin. Findings suggest that the preferential margin is positively associated with the utilization rates for FTA agreements. Results are found to be relatively robust after controlling for different fixed effects variables. Among the Philippines’ FTA partners, margin is revealed to be significant in increasing imports from its neighbors in the Association of Southeast Asian Nations region. Furthermore, the study found a positive and significant relationship between margin and imports of nearly all commodity groups.

Comments to this paper are welcome within 60 days from date of posting.


This publication has been cited 10 times

In the Media
  1. Aika Rey . 2021. PH fails to take advantage of Japan trade deal – study. Rappler.
  2. Angela Celis . 2021. Utilization rate of FTA under PJEPA ‘alarmingly low’. Malaya.
  3. Jenina P. Ibañez . 2020. Free trade agreements seen raising import utilization within ASEAN; Japan lagging. Business World.
  4. Jonathan L. Mayuga and Andrea E. San Juan . 2023. Offshore miners laud approval of tariff pledges under RCEP. BusinessWorld.
  5. Jun Yap. 2021. PIDS: Utilization rate of Phl trade pact under PJEPA ‘alarmingly low’.
  6. Manila-Shimbun . 2021. Utilization under JPEPA is ''alarmingly low'': state think-tank. Manila-Shimbun.
  7. Mayuga, Jonathan and Andrea E. San Juan. 2023. Offshore miners laud approval of tariff pledge sunder RCEP. RPN News.
  8. Ordinario, Cai. 2021. PHL’s use of FTA with Japan ‘alarmingly low’ rate. BusinessMirror.
  9. Sicat, Gerardo. 2021. The pandemic and the economic cha-cha are not separate issues. Philippine Star.
  10. Tyrone Jasper C. Piad . 2021. Manila, Tokyo push through with FTA review. Business Mirror.

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