An empirical assessment of the effects of the Japan-Philippine Economic Partnership Agreement (JPEPA) on Philippine exports to Japan: A gravity model approach

The Japan-Philippines Economic Partnership Agreement transcends conventional bilateral trade agreements as it contains measures to facilitate cooperation and investment in capital, technology, and people. Liberalization aims to facilitate trade between the two economies by eliminating restrictions. A modified gravity model was utilized using weighted average tariff rates imposed by Japan to Philippine exports to estimate the impact to Philippine export to Japan. Based on the findings, declining average tariff rate of Japan increases imports from the Philippines after one (1) period lag. The Japan-ASEAN economic partnership agreement also has a significant impact on the trade flow between Japan and Philippines.