The Philippines’ economic output this 2025 is not expected to be hit by the imposition of higher reciprocal tariff for exports to the US, which is set at 19 percent effective August 1.
The reduced tariff rate was arrived at after the US visit of President Ferdinand R. Marcos Jr. on July 20 to 22, down from the 20 percent announced a few weeks back but slightly higher than the 17 percent announced last April.
Finance Undersecretary Domini Velasquez, on the sidelines of the 2025 mid-year economic briefing hosted by the British Chamber of Commerce of the Philippines (BCCP) in Makati City Thursday, noted that Philippine exports to the US are small compared to other areas.
“Full year GDP (gross domestic product), very limited. For exports, of course, it will have an impact. But right now they (trade officials) are seeing limited (impact) but we need to see the whole picture,” she said.
Economic managers have set a 5.5 to 6.5% growth target for the country for the year. In the first quarter this year, GDP accelerated to 5.4% from the quarter-ago’s 5.3%. The goods exports target for this year is -2%. Last June, exports posted an annual growth of 26.1%, up from the 15.5% expansion last May.
Velasquez said they have noted the sustained rise of exports, likely boosted by front-loading among US businesses to prevent paying for more once the new tariff rate is in place.
Trade Undersecretary Allan Gepty, during the same event, said they continue to negotiate with their US counterparts on the specifics of the latest tariff rate, but said the 19% is what they are looking to implement starting Friday.
Asked for his outlook on front-loading among businesses, he said they have internal analysis. However, he declined to elaborate.
“But we want to see what the results would be,” he said. (PNA)