By Justine Irish D. Tabile, Reporter
THE DEPARTMENT of Trade and Industry (DTI) announced on Monday that it is willing to consider lowering tariffs on goods from the US in retaliation to US President Donald J. Trump’s enforcement of a 17% reciprocal tariff on products from the Philippines.
“We are really going to proceed with that… In fact, we, the economic team, will convene soon,” Trade Secretary Ma. Cristina A. Roque informed reporters on Monday.
She stated that the Philippines is “certainly” examining the possibility of decreasing tariffs on American merchandise, but emphasized that the economic team will deliberate on the magnitude of what the Philippines can propose.
Ms. Roque’s comments followed the agreement between US and Vietnamese leaders to discuss a “deal to eliminate tariffs” after a “highly productive phone conversation” on April 4, according to Reuters.
Ms. Roque mentioned that the Philippine government is also exploring a joint response with other member nations of the Association of Southeast Asian Nations (ASEAN) to counter the elevated US tariffs.
On Sunday, Malaysia’s Prime Minister Anwar Ibrahim urged for a unified ASEAN reaction to the US tariffs. He indicated that Malaysia, in its role as ASEAN chair, is prepared to spearhead efforts to “ensure ASEAN’s collective voice is distinctly heard on the global platform.”
The US imposed some of the highest tariffs on ASEAN nations, scheduled to take effect on April 9. Cambodia faces a 49% tariff, followed by Laos (48%), Vietnam (46%), Myanmar (45%), Thailand (37%), Indonesia (32%), Malaysia (24%), and Brunei (24%).
In comparison to its regional counterparts, the Philippines’ tariffs are among the lowest, only trailing Singapore, which has a baseline rate of 10%.
Malacañang stated on Monday that the administration is implementing measures to mitigate the effects of the 17% reciprocal tariff but refrained from providing specifics.
“I am aware that actions will be undertaken that will benefit our nation,” Palace Spokesperson Clarissa A. Castro expressed during a news conference.
In 2024, the Philippines imported $8.17 billion worth of goods from the US and exported $12.14 billion worth of products to the US, data from the statistics agency indicated. This resulted in a trade surplus of $3.97 billion last year.
The US is a vital source of agricultural imports, constituting about 20% of the Philippines’ total imports.
Previously, the DTI indicated its goal to engage the US in discussions to pursue a mutually advantageous trade agreement.
Specifically, Ms. Roque said she aims to facilitate improved market access for key US export interests, such as automobiles, dairy products, frozen meats, and soybeans, as part of a bilateral free trade agreement framework.
‘CAUTIOUS’
Meanwhile, Philippine manufacturing companies are expected to adopt a more cautious stance amid the uncertainty stemming from Mr. Trump’s tariff policies, according to an executive from an electronics firm.
“Perhaps after today, we’ll exercise more caution as we move into the second and third quarters… There’s a significant wait-and-see mentality among manufacturers and companies regarding the effects of the global tariff,” EMS Group Chairman and Chief Executive Officer Ferdinand “Perry” A. Ferrer shared with BusinessWorld during a phone discussion on April 3.
EMS Group is a comprehensive electronic, semiconductor, and medical subcontracting organization that offers technological and manufacturing solutions.
Mr. Ferrer stated that many domestic firms and international companies have postponed expansion plans in anticipation of the tariff announcement.
“The ripple effect is felt throughout the supply chain, which impacts the Philippines,” he remarked.
Mr. Ferrer added that the relatively lower tariff rate on the Philippines in comparison to neighboring nations positions it in a “favorable situation” to attract future investments.
“As we progress, we anticipate that we will conduct campaigns in our partner countries, including Taiwan, Japan, of course the United States, and some European Union nations, to facilitate the influx of essential foreign direct investments (FDIs) in manufacturing services,” he stated.
Earl Lawrence S. Qua, president of the Electronics Industry Association of the Philippines, emphasized that the government should strive to collaborate with the US to lessen the tariffs.
“We need to ensure that we do not escalate the situation further and aim to negotiate with the US to reduce tariffs. For now, we need to wait and see how these tariffs will be enforced,” Mr. Qua stated.
Nonetheless, Leonardo A. Lanzona, an economics professor at the Ateneo de Manila University, mentioned that while the 17% tariff “might appear minimal,” the consequences would be more significant in comparison to other nations given that the US is the top export destination for the Philippines.
“To presume that other countries would choose the Philippines because of the reduced tariffs is as illogical as the tariffs imposed by Trump,” Mr. Lanzona commented.
In 2024, the US remained the primary destination for Philippine exports, constituting 17% of the total.
COUNCIL
Meanwhile, the Philippine Economic Zone Authority (PEZA) asserted that it is imperative for the Philippine government to form an Economic Security Council in light of the new US tariffs.
“The initiative to establish an Economic Security Council is vital considering the global business threats presented by US tariffs, along with the geostrategic factors that the Philippines must now factor into these still uncharted territories,” stated PEZA Director-General Tereso O. Panga in a Facebook update.
“At PEZA, we believe it is essential to create a concrete roadmap to advance collectively — taking advantage of opportunities while diminishing the impact of tariffs on global trade involving the Philippines,” he added.
Previously, the Management Association of the Philippines (MAP) suggested the creation of an Economic Security Council under the Offfice of the President to respond to the implications of the US tariffs.
As per the MAP, the council should include representatives from the DTI, the Department of Foreign Affairs, the National Security Council, the Department of Finance, the National Economic and Development Authority, PEZA, the Anti-Red Tape Authority, the Department of Labor and Employment, alongside suitable private sector and industry representatives.
Mr. Panga emphasized that an initial step should involve securing reduced tariff lines for key economic zone (ecozone) exports to the US.
Notable ecozone exports to the US encompass EMS-SMS (electronics manufacturing services and semiconductor manufacturing services), machinery, transport equipment, automotive components, and select agricultural products, including coconut. — with Aubrey Rose A. Insosante and J.V.D.Ordoñez
