UK trade: £92M in tariff benefits await PH exporters

Philippine exporters missed out on preferential tariff treatment on an estimated £92 million (about ₱7.7 billion) worth of eligible shipments to the United Kingdom in 2025, underscoring the need for local businesses to make fuller use of the UK’s Developing Countries Trading Scheme (DCTS).

UK trade adviser Ellie Parker said Philippine goods worth about £1.8 billion entered the UK market last year, of which around £299 million was eligible for DCTS preferential tariffs. Only £207 million of eligible exports actually claimed the available benefits, leaving £92 million outside the preferential scheme.

Parker said the gap represents an opportunity for Philippine exporters to reduce tariff costs and strengthen their competitiveness in the UK market.

“The recent DCTS reforms have made it easier than ever for Filipino firms to qualify for that zero percent tariff duty,” Parker said during a recent webinar on maximizing the benefits of the scheme.

She said the Philippines is already well positioned to supply products in demand in the UK, identifying electronic equipment and machinery, bananas, plantains and pineapples, sustainable apparel, tuna, coconut products and spectacles as areas with further growth potential.

The DCTS, which took effect on June 19, 2023, replaced the UK’s Generalised Scheme of Preferences and provides eligible developing countries with reduced or zero import tariffs on qualifying products.

The Philippines is classified under the scheme’s Enhanced Preferences tier, which provides zero tariffs on 92% of product lines. The scheme also has Comprehensive Preferences for least developed countries and Standard Preferences for other eligible low-income and lower-middle-income economies.

For Philippine exporters, however, access to the preferential tariffs depends on meeting the DCTS rules of origin and properly claiming the preference.

Exporters must provide proof of origin and demonstrate that their products meet the applicable processing requirements to qualify for preferential treatment.

New rules widen opportunities

Parker highlighted reforms that took effect on January 1, 2026, which have made the rules of origin more flexible for DCTS beneficiaries. The UK government said the changes were designed to make it easier for eligible developing countries to trade with the UK.

For garments, the UK has liberalized product-specific rules for Enhanced Preference countries, allowing greater flexibility in sourcing inputs while retaining preferential treatment, provided the required processing takes place in the exporting DCTS country. The reforms also removed the previous double-transformation requirement for eligible apparel exports.

The UK has likewise expanded regional cumulation in Asia by creating a single 18-country regional cumulation group that includes the Philippines, Indonesia, Bangladesh, India, Pakistan, Sri Lanka, Cambodia, Laos, Myanmar, Nepal, Bhutan, Mongolia, Timor-Leste and countries in Central Asia, among others.

Cumulation allows exporters to source qualifying materials from designated countries within the regional group and, subject to the applicable rules, have those inputs treated as originating materials when determining whether the finished product qualifies for DCTS preferences.

For Philippine exporters, the expanded rules mean greater flexibility in sourcing inputs regionally, potentially allowing more products to meet the requirements for preferential tariffs.

Parker urged Philippine companies to take full advantage of the scheme, particularly as the UK’s latest reforms have lowered some of the barriers to qualifying for preferential treatment.

The opportunity is therefore not only to increase Philippine exports to the UK, but also to make existing shipments more competitive by ensuring that eligible products actually receive the tariff preferences available under the DCTS.