19% US tariff seen to have limited impact on Philippine economy 

The 19 percent US reciprocal tariff will have a limited impact on the Philippine economy, the Asian Development Bank (ADB) and CreditSights said in a report by Philippine News Agency.

"The announced US tariffs may have a limited direct impact on GDP growth given that the Philippines' economy is largely fueled by domestic demand, " ADB Senior Country Economist for the Philippines Jacqueline Connell told the Philippine News Agency on Thursday.

US President Donald Trump earlier announced that his country would impose a 20 percent tariff on Philippine exports.

President Ferdinand R. Marcos Jr. recently met with Trump to negotiate.

Following negotiations, Trump announced that Philippine exports to the US would now be subject to a 19 percent tariff.

While the direct impact on the economy will be limited, Connell said the global growth slowdown and increased trade uncertainty would weigh on the country’s growth prospects.

"These could have effects across various channels, including disruptions in global supply chains and investment patterns, and interactions with financial markets. As noted earlier, business sentiment has softened amid heightened volatilities and uncertainties," Connell said.

Connell noted that these developments present an imperative to further strengthen the investment climate, accelerate critical infrastructure investment, and other measures to raise productivity and competitiveness.

"These factors will be important in making the country a more attractive trading partner and investment destination amidst possible relocation of global supply chains," Connell said.

In a separate report, CreditSights, a FitchSolutions company, said the 19 percent tariff on Philippine goods is lower than most of Southeast Asia.

Current tariff rates on Southeast Asian nations include Laos (40 percent), Cambodia (36 percent), Malaysia (25 percent), Vietnam (20 percent on all exports, 46 percent on transshipments), and Singapore (10 percent).

"We anticipate the US tariffs to have a limited impact on the Philippines’ economy," CreditSights said.

Citing views from its sister company BMI, CreditSights said the Philippines has a relatively low export exposure to the US, at 17 percent of total exports.

It added that the contribution from exports to total gross domestic product is relatively low, at 13 percent of GDP.

"BMI and CreditSights’ sovereign analyst expect growth in the Philippines to remain resilient, with full-year 2025 GDP growth close to the lower bound of the central bank’s 5.5 percent target range," the report said.