MANILA, Philippines — The Philippines is taking action in response to the 17 percent reciprocal tariff on exports to the US, Malacañang said yesterday, as fears persist over a possible worldwide economic recession and spike in prices driven by the new tariff regime.
“I know there will be an action that will favor our country. But I cannot give the details until the talks are final,” Presidential Communications Undersecretary Claire Castro said at a briefing.
She said the administration is definitely crafting plans to address the tariffs to be implemented by the US – a traditional ally and major trading partner of the Philippines.
“The action on this will be good, but I cannot provide the details until an action is made. There are plans already and I will give you the details once the plans are final,” she added.
It was not clear if the plans include reducing tariffs on US goods, as what Trade Secretary Cristina Roque told reporters yesterday.
“We’re really going to do that,” Roque replied, when asked if the Philippines would be willing to bring down tariffs on imports from the US following Vietnam’s offer to remove tariffs on US goods.
She said the economic team is going to meet soon to discuss the matter.
According to a Bloomberg report, Vietnamese communist party chief To Lam made the offer in a letter to US President Trump. Vietnam also asked for a postponement of the implementation of the reciprocal tariff for at least 45 days.
The so-called Liberation Day tariffs, which will take effect on April 9, will cover more than 100 countries, including China and those in the European Union.
Justifying his controversial move, US President Donald Trump claimed that US has been “looted, pillaged, raped, plundered” by other nations and that the new tariffs would “make America wealthy again.”
The 17 percent tariff to be imposed on the Philippines is comparatively lower than the rates set for other countries, but is higher than the 10 percent baseline figure for Britain and Singapore.
The tariff rates for other Southeast Asian countries are 49 percent for Cambodia, 46 percent for Vietnam, 36 percent for Thailand, 32 percent for Indonesia and 24 percent for Malaysia.
Exports from China and the EU will be levied with 34 percent and 20 percent tariffs, respectively.
ASEAN teleconference
Indonesian President Prabowo Subianto, Malaysian Prime Minister Anwar Ibrahim, Brunei Sultan Hassanal Bolkiah, Singaporean Prime Minister Lawrence Wong and President Marcos earlier held a teleconference to exchange views on the US tariff policy, Indonesian news agency Antara reported last Saturday.
Ibrahim was quoted by the report as saying that the economic ministers of the Association of Southeast Asian Nations would meet next week to discuss a “joint response” to Trump’s tariff measure.
Castro previously said that the effect of the reciprocal tariff on the Philippine economy would be “minimal.”
The US accounted for 17 percent of total Philippine exports of goods last year. Of the total exports to the US, 53 percent are semiconductors and electronic products.
The US is also the Philippines’ biggest source of agricultural products, accounting for 20 percent of total agricultural imports.
Data from the Office of the US Trade Representative showed that the American goods trade with the Philippines hit an estimated $23.5 billion last year. Exports by the US to the Philippines in 2024 totaled $9.3 billion, or 0.4 percent higher than in the previous year.
Imports from the Philippines totaled $14.2 billion in 2024, up 6.9 percent from the figure two years ago. The US goods trade deficit with the Philippines was $4.9 billion last year, a 21.8 percent increase from 2023.
University of Asia and the Pacific School of Economics associate professor George Manzano said in an email that the government should negotiate with Trump on the tariff issue.
He said the government should “lower tariffs on certain products in a tit for tat agreement with the US.”
Philippine Economic Zone Authority (PEZA) director general Tereso Panga expressed support for the creation of an economic security council as proposed by the Management Association of the Philippines (MAP), in response to Trump’s reciprocal tariffs.
“The proposal to establish an economic security council by the MAP is crucial, given the global business risks posed by US tariffs, as well as the geostrategic considerations that the Philippines must now take into account in these still uncharted waters,” Panga said in a social media post yesterday.
“In PEZA, we believe we must craft a concrete roadmap to move forward together – seizing opportunities while mitigating the impact of tariffs on global trade involving the Philippines,” Panga said.
Farmers always relevant
Former agriculture chief Leonardo Montemayor, for his part, chided Agriculture Secretary Francisco Tiu Laurel Jr. for accusing farmers’ groups of just “wanting to be relevant” during the election period when they cautioned the government against complacency in the face of the new tariff regime under Trump.
In an interview with The STAR, Montemayor said the farmers’ views – raised through the Federation of Free Farmers and the Magsasaka party-list group – will always be “extremely important and relevant” during or outside the campaign period.
“They (farmers) should be given utmost consideration by Department of Agriculture, Department of Trade and Industry and other agencies,” Montemayor said.
He has contradicted statements from several government officials that the Philippines may benefit from the tariff adjustment since many competing countries like Thailand and Vietnam have been slapped with higher tariffs.
He said competing countries may always provide additional support to their producers and exporters in order to offset the increase in US tariffs and maintain their competitive advantage.
At the same time, Montemayor warned of a potential dumping of excess agricultural products by countries that would be shut off from the US market due to the high tariffs.
Montemayor said among those at risk are the country’s 3.4 million coconut farmers who may see copra prices plunging if foreign demand slows down due to the tariff hikes.
He said in 2023, the country exported nearly P22 billion worth of coconut products to the United States.
“Historically, the Philippines has incurred huge agricultural trade deficits. In 2024, the country imported about two and a half times more agricultural products than what it exported both to the US and the world,” Montemayor noted.
Failure
Former Bayan Muna congressman Carlos Zarate, meanwhile, denounced Trump’s tariff move, saying it was a glaring example of the failure of liberalization and globalization.
“This move by the United States, while preaching open markets and deregulation, is hypocritical and contradicts its protectionist actions that harm economies like the Philippines,” Zarate said in a statement.
“This is emblematic of the utter failure of liberalization and globalization. While the US forces other countries like the Philippines to open its markets, deregulate industries, privatize utilities and maintain sub-human wages, it is implementing protectionist measures and doing the opposite of what it is preaching,” he added.
He also called for a “reevaluation of the onerous treaties and agreements that previous Philippine administrations entered into, which have proven to be gravely detrimental to the Filipino populace.”
“It is high time that we should protect our own economy, people and resources. We must scrap these onerous treaties and agreements that previous Philippine administrations entered to the detriment of our people,” Zarate said. — Bella Cariaso, Jose Rodel Clapano