Philippine Eyes Trade Deal Amid US Tariff Extension
Nation seeks “mutually beneficial” agreement as Washington delays new import duties.
Philippine officials are leveraging a one-week extension on new U.S. tariff rates to press for a favorable trade agreement. The delay allows for continued discussions aimed at securing terms beneficial to both nations.
Intensified Negotiations Planned
Trade Secretary **Cristina Roque** confirmed the government’s commitment to ongoing talks. On the part of the Philippine government, we will continue with our talks with the US, and hopefully we can come up with a mutually beneficial deal the soonest possible time,
she stated Friday. Meanwhile, efforts to broaden the Philippines’ trade relationships are set to continue.
Diversification is seen as crucial for navigating potential tariff increases on exports to the United States. Authorities are actively exploring new international markets for Filipino products to mitigate risks and create fresh business avenues.
Philippine exports were slated to face a 19% reciprocal tariff starting August 1, a measure attributed to U.S. protectionist policies. This rate is noted as one of the lower tariffs among Asian countries, achieved without compromising the agricultural sector or offering tariff reduction alternatives.
Market Reaction and Economic Outlook
Analysts suggest that uncertainty surrounding these trade negotiations contributed to a weaker performance in the Philippine Stock Exchange index and a decline in the peso’s value this week. Investors are reportedly adopting a cautious stance, awaiting clarity on potential U.S. compromises.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., commented on the market’s sentiment. He noted that investors remain in a wait-and-see mode if [US President Donald] Trump would be willing to compromise and settle for lower negotiated tariffs during the trade negotiations/talks, given the TACO track record in recent months,
referencing the informal moniker “Trump Always Chickens Out.”
Initially, the U.S. had announced a 17% tariff in April, which was later increased to 20% before being adjusted down to 19%. This final rate followed the U.S. visit of President **Ferdinand Marcos Jr.** and his delegation between July 20 and 22.
The U.S. Department of Commerce reported that in 2023, the Philippines exported approximately $10.9 billion worth of goods to the United States, underscoring the significance of these trade relations. (U.S. Census Bureau, 2024)