Philippines to finesse US tariff

According to economist and former lawmaker Joey Salceda, the recent announcement of US President Donald Trump that the US and the Philippines have agreed on a tariff deal that would give a zero tariff on US exports to the Philippines and a 19 percent tariff on Philippine exports to the US, is still not a done deal and would still be subject to further talks.

Salceda, who now heads the  Institute for Risk and Strategic Studies Inc. or Salceda Research, said that details of the Trump-President Marcos trade agreement are still being ironed out, and that President Marcos, “out of an abundance of courtesy and diplomatic finesse, is right not to directly correct President Trump’s sweeping initial announcement.”

Salceda, who claims to “having had conversations with the people working on the details,” assured that:

1. There will be further rounds of talks for key exemptions to the broad 19 percent tariff imposed. The aim is to get even lower tariff rates for Philippine goods. Principal targets are textile and electronics exports of the Philippines.

2. Zero tariffs for the US may not be as sweeping as Trump makes it appear. The US wants zero tariffs on cars, since the Japanese, the Chinese and in some cases, even the Vietnamese, are pricing them out of competition. Out of diplomatic poise, it is right that President Marcos let Trump have his moment for his own domestic audience, and we work on the details later.

3. Zero tariffs on US-made capital equipment will be beneficial for our manufacturing. The semiconductor industry in the country could certainly benefit from zero tariffs on US-made photolithography machines, wafer etching tools, ion implanters and inspection systems. Zero tariffs on these low-revenue, but high-return imports will be mutually beneficial for our economies.

4. The strategic partnership in security matters between the Philippines and the US has been reaffirmed. Note that even when aid to Ukraine and deployment in countries like South Korea have been paused or questioned or significantly reduced due to “cost considerations” and “fairness,” the Philippine-US defense cooperation agreement has been kept intact and is, in fact, being considered for expansion, which is very likely.

5. We are getting non-tariff deals, such as the financing for key projects, such as the partnership between the United States Trade and Development Agency and the Philippines’ Department of Transportation for technical assistance for the construction of the Subic-Clark-Manila-Batangas Railway. There are more to come.

6. A Phl-US FTA is becoming increasingly possible. Being a net exporter to the US, we stand to benefit from such a deal. Thanks to the cordial discussion between President Marcos and Trump, this is being seriously discussed in policy circles in Washington DC, especially among Republican aides.

7. The one percent  tax on OFW remittances that Trump’s Big Beautiful Bill will impose in 2026 can be administratively overcome, and that is also under discussion. The US could issue a rule or bilateral agreement recognizing Philippine banks in the US, such as BDO, Metrobank and PNB US branches, as regulated US financial institutions under the exemption clause.

8. There’s still plenty of leverage for the Philippines, including non-tariff barriers on US beef, wheat, corn and other agricultural products. Trump did not say anything about perceiving our NTBs as “unfair.” Watch this space, especially as we modernize our own biosafety rules.

9. The US has reaffirmed support for our policy position in the West Philippine Sea. That is leverage for future Philippine requests for defense modernization assistance. Note that Trump was the first US president to clearly support the Philippine position on this issue.

10. Discussions continue on intergovernmental partnership in humanitarian assistance and disaster response. There is an ongoing partnership between the US and the Philippine OCD on disaster preparedness and response. US forces will support Habagat relief missions as affirmed today. The resumption of the US grants to OCD for disaster preparedness is under discussion.

Salceda concluded that “Trump always plays to his domestic audience. Plenty of deals can be made with that knowledge.”

ADB, AMRO downgrade Phl growth forecast

Both the Asian Development Bank (ADB) and the  ASEAN+3 Macroeconomic Research Office (AMRO) have downgraded their growth forecast for the Philippines.

The ADB released its adjusted July forecast for Philippine growth this year to 5.6 percent from its higher April growth forecast of six percent, and likewise lowered its 2026 projection to 5.8 percent from the previous projection of 6.1 percent.

Following suit, AMRO made a similar downward adjustment from a projection of  6.3 percent  growth for 2025 and 2026 to 5.6 percent this year  and slightly lower for 2026 to a 5.5 growth due to the overall effect of the US tariff adjustments for the ASEAN+3 members.

The AMRO forecasts the ASEAN+3 region to grow at 3.8 percent this year and down to 3.6 percent in 2026.

AMRO revealed its latest quarterly update of its flagship ASEAN+3 Regional Economic Outlook (AREO) Wednesday, citing heightened global uncertainties, particularly the evolving US tariff measures.

The growth forecasts represent a downward revision from AMRO’s April projections of 4.2 percent for this year and 4.1 percent in 2026, which did not include the impact of the then newly announced US tariffs.