The Department of Trade and Industry (DTI) maintained the Philippines was fortunate to have the lowest discounted reciprocal tariffs announced by US President Donald Trump at 17 percent on all imports entering the US.

“While our initial analysis indicates that the direct impact may be less substantial compared to other Association of Southeast Asian Nations, we recognize the importance of proactive engagement,” Trade Secretary Cristina Roque said in a Viber message.

“The United States remains a crucial export market for the Philippines, accounting for approximately 17 percent of our total exports as of 2024. Notably, electronic products comprise a significant 53 percent of these exports, and overall about 10 percent of our total trade involves the US,” she explained.

Roque said that, in particular, the US plays a vital role as a major source of agricultural imports, representing approximately 20 percent of the country’s supply, underscoring its reliability as a partner in ensuring food security.

“In this context, we see an opportunity to deepen our strategic partnership with the US. Our focus is on collaborative efforts to build a secure and resilient supply chain, facilitate the efficient movement of goods, and enhance economic security for both nations. We are also committed to exploring avenues for strengthened food security, expanded market access, and equitable trade,” Roque said.

To further this objective, the DTI secretary has expressed a desire to meet with her US counterpart to discuss strengthening trade relations between the two countries.

“The DTI acknowledges the multifaceted nature of tariff impositions, which can serve various purposes, including protecting domestic industries, generating revenue, reducing input costs, and fostering fair competition,” she said.

Trump on Thursday (Manila time) announced a sweeping 10-percent tariff on imports from around the world, according to a report by Agence France-Presse. However, annexes of the fact sheet from the White House showed that the imposed tariff for the Philippines would be at 18 percent.

Despite this, the Philippines had the second-lowest tariff imposed on US-bound imports compared to its ASEAN counterparts, with Cambodia facing the highest tariff at 49 percent, followed by Laos (48 percent), Vietnam (46 percent), Thailand (37 percent), Malaysia (24 percent), and Singapore with the lowest at 10 percent.

‘Advantageous’

Moreover, Roque said they view with guarded optimism that the recent US imposition of reciprocal tariffs will provide strategic opportunities for the Philippines to improve its economic relationship with the US.

She highlighted that certain products are exempt from the imposition of reciprocal tariffs, including product categories exported by the Philippines to the US, such as copper ore, concentrates, and integrated circuits, among other things.

“We are carefully studying the impact of reciprocal tariffs on agri-based products, particularly food exports, noting that these are not covered by the exemptions. The recent US measure has made US imports more expensive so that their domestic manufacturers can compete. Equally important for the US is to improve its access to rapidly growing economies such as the Philippines,” she said.

In this regard, she said the government aims to actively engage the US in discussions to facilitate enhanced market access for key export interests, such as automobiles, dairy products, frozen meat, and soybeans, within the framework of a bilateral free trade agreement. This will allow both sides to pursue mutually beneficial trade.

“The new tariffs also put the Philippines in a more advantageous position, particularly for certain export products like coconuts. With lower tariffs than Thailand, Philippine coconut exports can be more competitive. The task at hand right now for the DTI and other government agencies is to act fast and take advantage of this new development,” Roque said.

Meanwhile, Special Assistant to the President for Investment and Economic Affairs Secretary Frederick Go said the 17-percent tariff on US imports will open doors and opportunities for companies based in countries with higher tariffs to seriously consider investing in the Philippines.

“They must set up manufacturing facilities here to take advantage of our relatively much lower tariffs. The reality is we are a close ally, therefore, we must attract more US companies to invest here. Now is the opportunity,” he said.

Despite this, Go said the Philippines remains agile in securing a free trade agreement with the US, “which is the desire of the government.”

“But it takes both sides to agree,” he said.

Earlier, the Board of Investments said it will push to secure a bilateral FTA with the US, which might happen under the administration of President Trump.

A bilateral FTA between the Philippines and the US was not on the negotiating table during the previous Biden administration, which in 2023 said it was more focused on its Indo-Pacific Economic Framework initiative.