EXPECT cheaper automotive vehicles, including parts and components from South Korea, as a result of its free trade agreement (FTA) with the Philippines.The agreement, which took effect on Dec. 31, 2024, reduces taxes on South Korean vehicles, parts and components. 'This will lead to cheaper costs for vehicle assemblers and car owners,' Trade Secretary Cristina Roque said in a statement on Saturday.In the FTA, the 5.0 percent import tariff on vehicles from South Korea to the Philippines is canceled. Import duties of up to 30 percent on Korean automotive parts will be phased out in five years, along with taxes on Korean electric and hybrid vehicles.The South Korean government earlier said it anticipates the FTA to boost exports of its cars and auto parts to the Philippines.The Department of Trade and Industry noted the FTA enables South Korea to compete with automotive players from Japan, the United States, and China.'This is a significant stride in growing trade and investment between the Philippines and South Korea, as it represents a collective achievement that will truly set the stage for the growth of our industries and businesses,' Roque said. 'To ensure the success of the FTA and all existing economic mechanisms between our countries, we recognize the significant role of continued partnership and stronger stakeholder engagement.'

Other sectors in FTAIn addition to automotive benefits, the FTA covers various sectors, including tropical fruits, minerals processing and electric vehicle manufacturing. It also provides safeguard measures on certain sensitive Philippine industries with no tariff cuts for South Korean exporters on products such as beverages, batteries, sugar and other agricultural goods.In 2023, bilateral trade between the two countries amounted to $12 billion.