Phl backing calls for collective response to reduce export tariffs

The Philippines, being a member of the Association of Southeast Asian Nations (ASEAN), will support Malaysia's call for a collective Southeast Asia tariff response, following the imposition of skyrocketing tariffs by the United States on goods made in ASEAN member nations.

The Philippines received the second-lowest imposed tariff of 17 percent, while neighboring countries such as Vietnam (46 percent), Thailand (36 percent), Indonesia (32 percent), and Malaysia (24 percent) face significantly higher tariffs.

“We are (definitely) looking to reduce tariffs. Yes, we are supporting Malaysia being a member of ASEAN. We should all work together. The economic team will meet and talk tomorrow. But for now, it’s still 17 percent,” Roque told reporters in an ambush interview during the signing of the Memorandum of Agreement between the DTI and the Department of Tourism.

The trade chief further stressed that the Philippine government would negotiate with the U.S. through her counterpart at the White House.

“I already signified the meeting two or three weeks ago with my counterpart in the U.S. and I am still waiting for their response because everyone (in ASEAN) wants to talk with them, especially those countries that have high imposed tariffs. Maybe in the next few days, they will have answers,” according to Roque.

A report by Nikkei Asia said that Malaysia will seek this week to forge a united ASEAN response to the sweeping reciprocal tariffs announced by the U.S. last week, quoting Malaysian Prime Minister and ASEAN bloc president Anwar Ibrahim.

The Malaysian official said he would discuss the matter with several of his counterparts in the regional bloc, including the Philippines.

The report said that Anwar, in a video address late Sunday night, showed that Southeast Asian countries are among the hardest hit by the new U.S. measures.

He asserted that the sweeping tariffs mark only "the beginning of greater challenges" in the external economic environment, the report said.

The Management Association of the Philippines earlier expressed deep concerns about the imposition of 17% tariffs on U.S.-bound Philippine imports, even if the country's economic managers, including Special Assistant to the President for Investment and Economic Affairs, Secretary Frederick Go, treat the reciprocal tariffs as beneficial to the country rather than a huge burden, especially to Philippine importers of goods to the U.S.

“While our country at this time is seen as not as negatively affected as others, with the global economy being an integrated ecosystem, we cannot discount the possibility that as other countries are affected, it may prosper into a contagion that will eventually affect us,” the group said in a statement on Friday.

“This is a reality that will spread across many countries and will clearly have varied economic impacts on each nation,” the MAP statement, signed by its president, Alfredo Panlilio, maintained.

Advantage

Meanwhile, Philippine Economic Zone Authority Director General Tereso Panga said the 17% tariff imposed by the U.S. on Philippine exports presents a significant advantage for the country—particularly for PEZA and other IPAs (investment promotion agencies).

"As we anticipate more global MNCs (multinational corporations) in the region to relocate their facilities in our ecozones, they are drawn by our preferential tariff rates, close ties with the U.S., ease and lower cost of doing business, most generous fiscal incentives for investors (across ASEAN) under the CREATE MORE regime, a large talent pool, and strong economic performance,” he said on his Facebook page on Monday.

However, Panga said that the country must step up and scale up its manufacturing capabilities to fully capitalize on opportunities arising from the China+2 strategy and U.S. reciprocal tariffs.

“It is imperative that we move up the value chain, leveraging our traditional strengths in electronics, automotive, and agricultural products, while preparing our workforce for advanced manufacturing. We should also focus on boosting the production of high-demand exports to the U.S., such as consumer goods, machinery and electrical products, and textiles—items currently produced largely in Vietnam and Cambodia,” he said.

Panga said the Philippines could attract these export producers from high-tariff countries to consider the Philippines as a cost-effective alternative that maintains U.S. market access while benefiting from the ASEAN FTA (free trade agreement).

To achieve this, the government must accelerate logistics infrastructure development and digital transformation, which will enable the Philippines to position itself as a global manufacturing and regional supply chain hub—and ultimately, as the preferred investment destination in the region.

“The tariff imposed on the Philippines presents a unique opportunity for us to evolve and catch up with our ASEAN neighbors who currently export more to the U.S. By strengthening our manufacturing base, we can diversify our export products and markets, leveraging regional trade agreements to mitigate tariff impacts,” according to Panga.