Photo from: Manila Bulletin

The Philippines and the United Arab Emirates achieved their first free trade agreement— the Comprehensive Economic Partnership Agreement (CEPA), which took place last January 13, 2026, during the Abu Dhabi Sustainability Week (ADSW 2026). This serves as the Philippines’ first free trade deal with a Middle Eastern country and adds to its network of trade agreements. Philippine President Ferdinand Marcos Jr. and UAE President Sheikh Mohamed bin Zayed Al witnessed the signing of the CEPA, which was then signed by the Philippines’ representative Trade Secretary Ma. Cristina Roque and UAE Representative Minister Thani Ahmed Al Zeyoudi. 

According to the Presidential Communications Office, the CEPA aims to reduce tariffs, enhance market access for goods and services, increase investment flows, and create new opportunities for Filipino professionals and service providers in the UAE. The deal includes targeting liberalization covering at least 90% of tariff lines and trade value. This benefits Philippine exports, including bananas, canned tuna, pineapple, electronics, machinery, and other high-demand products. Filipino firms can now have equal access in the UAE, as CEPA also ensures non-discriminatory access to services in IT-BPM, healthcare, tourism, construction, education, and MSMEs. Preliminary studies found that the CEPA could boost Philippine exports by 9.13%, increase consumer savings by enabling access to more affordable imported products, and strengthen Gulf trade links, thereby building on pre-existing flows in which the UAE is the Philippines’ top Middle East partner.

By reducing trade barriers between the two nations, CEPA can boost economic growth, as the deal promises expanded exports, lower consumer prices, support for MSMEs, and job creation for Filipinos in the UAE. Empirical evidence from other developing nations with CEPA with the UAE validates this upside. For instance, the bilateral trade between the UAE and India crossed $100 billion in FY2024-25. India’s merchandise exports to UAE have reached about USD 36.6 billion in FY2023-24. Sectors with many MSMEs, such as gems and jewelry, have almost doubled their exports (Desk, 2025). However, competition may arise from UAE imports, as increased imports lower prices for consumers, potentially pressuring unprepared local firms on price and volume, leading to market loss, firm closure, and layoffs. Under the India-UAE CEPA, an agreement was reached that included robust rules of origin to protect both economies from misuse by third countries, including a requirement that steel exports be “melt and pour” to qualify as domestically produced products from either country (ENS Economic Bureau, 2022). The agreement also provides a permanent safeguard mechanism to protect businesses in both countries to prevent “ any unnecessary or unwarranted surge in volumes of (imports) any particular product, according to Goyal (ENS Economic Bureau, 2022). Nevertheless, local firms must prepare price-wise, quality-wise, and delivery-wise. Otherwise, imports will proliferate, potentially leading to a trade deficit. To counter the FTA competition pressure on local firms, the government can mitigate strategies such as providing subsidies, training programs, and safeguards. The Philippines has other existing agreements with the UAE, such as the Investment Promotion and Protection Agreement and cooperation on trade, energy, logistics, innovation, and tourism (Romero, 2026).