A pearl amid the Orient tariff wars

With the recent positive outcome of the meeting between Philippine trade and economic officials and the United States Trade Representative, the country showed it is moving strategically to assert itself as a stable and strategic investment destination in Asia.

It's been nearly a month since President Donald Trump announced tariffs that have sent shockwaves through Asia’s manufacturing economies. Indonesia, Thailand, Vietnam and Cambodia—once favored for their low-cost production—could soon be reeling from levies of 32 percent, 36 percent, 46 percent and 49 percent, respectively, on their exports to the US. A pause may be in place but the imposition of the new duties is seen to be transformative for the Philippines.

While Philippine goods could also be hit once the new regime is enforced, the 17 percent tariff rate — which could be further slashed following the Philippine delegation’s talks — is significantly lower than our Southeast Asian peers and is second lowest next to Singapore’s 10 percent. That relative advantage, combined with a relatively less export-dependent manufacturing base, uniquely positions the country to absorb the production shift currently underway.

The electronics and manufacturing sector—one of the Philippines’ most vital export pillars—has already begun drawing increased attention from companies urgently diversifying supply chains away from higher-tariff countries. Some special economic zones have already seen a surge in inquiries. With the lower tariff, coupled with competitive labor costs, affordable land, a workforce that is young, English-speaking, and highly trainable, the Philippines emerges as a strategic destination for manufacturers rethinking logistics and supply chain strategies in response to the new tariff regime.

To turn this temporary advantage into a long-term win, the Philippines has taken a bold step to deepen its trade relationship with Washington. Add to this the latest development on the Philippines’ continued exclusion from the USTR’s 2025 Special 301 Report, a document that flags nations with problematic IP practices.

I am very ecstatic that the country has been out of the watchlist for 12 straight years, five of them during my term as Intellectual Property Office of the Philippines director general from 2020 to 2024. This exclusion reflects growing US confidence in the Philippines’ regulatory environment. Overall, improved trade relations could reinforce the Philippines’ emergence as a trusted trade and investment partner in a time of growing global uncertainty.

At home, several developments have also been undertaken to attract investors. With the recent passage of the Ease of Paying Taxes (EOPT) Act and the CREATE MORE Act, the Philippines has drastically improved its investment climate. Corporate income taxes for registered enterprises are down to 20 percent, streamlined VAT refunds processing, and deductions for power expenses directly address one of the most cited manufacturing pain points. Digitized systems and simplified tax filing further reduce the cost of doing business.

To bolster the country's chances, the Asian Consulting Group (ACG) is launching satellite offices in Singapore, Sydney, Dubai, San Francisco, and London, providing on-the-ground support for foreign investors and multinational corporations seeking to enter or expand within the Philippine market.

ACG has also partnered with the Philippine Economic Zone Authority (PEZA) for the ACG 2025 International Tax & Investment Roadshow in Warsaw, Poland and the United Kingdom. This highlights the Philippines not only as a growth market but also as a model for sustainable, inclusive development where ESG investing and sustainable tourism can flourish.

With global investors eyeing Southeast Asia amid the shifting trade dynamics, ACG hopes to contribute to the country in turning the uncertain global tensions into an opportunity to spotlight the Philippines as the next most resilient, reform-driven, and future-ready destination for foreign direct investments.