Philippines to get lower U.S. tariffs than Asian rivals

Philippine exports to the United States will face lower tariffs than those of other Asian countries, the Department of Finance (DOF) said on Wednesday, citing the country's resilience amid global trade shifts.

Finance Secretary Ralph Recto said the Philippine economy, driven primarily by domestic demand, remained relatively robust despite potential headwinds from supply chain disruptions, higher interest rates, and inflation.

"The Philippine economy is primarily driven by domestic demand rather than exports. This makes us relatively resilient against trade wars," Recto said. "However, as with all countries, we are not spared from the impact of the expected decline in international trade and possible slowdown of global growth."

Recto said the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act would help attract investors seeking to relocate or expand in the Philippines, given its lower U.S. tariffs.

The DOF said Philippine exports to the U.S. would face a 17% tariff, compared with higher rates for ASEAN neighbors: Vietnam (46%), Thailand (36%), Indonesia (32%), Malaysia (24%), and Cambodia (49%).

The government sees opportunities for the Philippines to become a hub for global value chains, particularly in electronics, textiles, food, and automobiles. Recto highlighted the country's advantage in coconut-based products and garment exports, as major competitors face higher U.S. tariffs.

To diversify its export markets, the Philippines is pursuing free trade agreements with the United Arab Emirates, the European Union, Chile, and Canada, he added.