Japan was an active trading partner of the Philippines. In 2000, Japan accounted for 14.73% of Philippine exports. Figure 2 shows the historical value of export trade from the Philippines to Japan in logarithm form. Although commercial value increased, commercial value declined sharply in the first quarter of 2012. This may be the effect of the ASEAN-Japan Economic Partnership (AJCEP), which spread Japan`s trade agreements to other ASEAN countries. The AJCEP may have had an impact on Japan`s imports from the Philippines. Figure 3 is Japan`s historical weighted average duty on Philippine exports. The two sides will promote bilateral cooperation to contribute to the strengthening of the economic partnership between them in nine areas, namely human resource development, financial services, information and communication technologies, energy and environment, science and technology, trade and investment promotion, small and medium-sized enterprises, tourism and transport. Most studies that have analyzed the impact of bilateral trade use panel data regressions to obtain empirical results (see Arvis and Shepherd 2013; Fratianni and Oh 2009; Stack 2009; Vicard 2009; Sons and Lee 2010; Garcia et al. 2013; Naanwaab and Diarrassouba 2013; Drzewoszewska 2014; Ravishankar and Stack 2014; Sanora 2014; Gervais 2015; Kunroo and Azad 2015; Bujang 2016; Cipkute 2016; Eita 2016; Iqbal 2016; Liu 2016; Park and Park 2016). An important economic dimension of the agreement that this document hopes to unravel would be the possible increase in foreign direct investment from Japan to the Philippines and the improvement of the Philippines` trade balance with Japan.

Jalles J (2012) Openness, regional trade agreements and growth: evidence from Asia. Asian Econ J 26(1):63-85 Rahman K, Molla R, Murad M (2008b) The China factor blunts the cut of the Japan-Malaysia free trade agreement. Glob Econ J 8(4):1524-5861 Naanwaab C, Diarrassouba M (2013) The impact of economic freedom on bilateral trade: a cross-country analysis. Int J Bus Manag Econ Res 4(1):668 The objective of the agreement is to promote the free cross-border movement of goods, people, services and capital between Japan and the Philippines. The agreement also aims to promote a comprehensive economic partnership including intellectual property, competition policy, improvement of the business environment and bilateral cooperation in areas such as human resources development, information and communication technologies and small and medium-sized enterprises. Once the agreement is concluded, the agreement will help to take advantage of the complementary relations between Japan and the Philippines, thus strengthening existing bilateral economic relations. Urata S (2004) The creation and dissemination of free trade agreements in East Asia. Jpn Econ 32(2):5-52 Hayakawa K, Ito T, Kimura F (2016) Trade creation effects of regional trade agreements: tariff reduction versus non-tariff barrival. Rev Dev Econ 20 (1):317-326 Chapter 1 (General Provisions), Article 1 (Objectives) of the JPEPA, the agreement has as its objective the following. More than 10 years have passed since the signing of the agreement and no empirical analysis has been carried out to assess the overall performance of the economic partnership. Based on data from UN COMTRADE statistics, exports from the Philippines to Japan increased by 24% in 2010, 2 years after the implementation of the agreement.

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