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Friday, July 11, 2025 Vol. 20 No. 270
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PHL WON’T HIT BACK AS U.S. UPS TARIFFS TO 20%
Jan-April FDI slips 33%; tariffs seen to worsen it
By Malou Talosig-Bartolome @maloutalosig Andrea E. San Juan @andreasanjuan and Reine Juvierre S. Alberto
S
TARTING August 1, 2025, the United States will impose a 20-percent general tariff on all Philippine exports to the US. Washington informed Manila of this via a letter from President Donald Trump to President Ferdinand Marcos Jr., citing persistent trade imbalances and non-reciprocal policies.
The Philippines, however, does not consider countermeasures a good response as this would only hurt it in the long run; it will instead focus on constructive, “win-win” negotiations, according to Finance Secretary
By Cai U. Ordinario @caiordinario
T
HE slump in the country’s Foreign Direct Investments (FDIs) in the first four months of the year may already be a preview of what’s to come in the next few months due to higher US tariffs, according to economists. On Thursday, the Bangko Sentral ng Pilipinas (BSP) reported that the country’s FDI net inflows decreased by 33.4 percent to $2.4 billion in the January-April period this year from the $3.6 billion recorded last year. This was despite the increase in the country’s FDIs to $610 million recorded in April 2025, a 7.1-percent growth from the $570 million posted in April 2024.
Ralph Recto. Private economists reacted similarly. In justifying the move to raise from 17 percent to 20 percent the tariffs on Philippine exports, Trump wrote: “Our relationship has been,
See “PHL,” A2
TRADING CAREFULLY: PHL Seeks Win-Win as US Imposes 20% Tariff tor y alia s RetTarif f
Diplomacy
Top Export Sectors Affected ➔Electronics (over 50 percent of PHL exports to US) ➔Apparel (Garments, fast fashion)
Pre-2025: 17%
August 1, 2025: 20%
➔Agriculture (Coconut oil, canned pineapple, seafood)
US Tariff Rates on Asean Countries (July 2025)
❝We don’t want additional tariffs. It
makes our products more expensive. The lower the tariffs, the better for our exporters.❞— Finance Secretary Ralph Recto
❝We want their help on security issues. They provide much-needed arms.❞
—Jonathan Ravelas (Reyes Tacandong & Co.)
❝Higher Philippine tariffs on US imports are not a good strategy and would only provoke higher US import tariffs on the Philippines.❞—Michael Ricafort (RCBC) ❝This poses significant challenges to
the competitiveness of our industries... underscores the importance of diversifying our export markets and investing in domestic competitiveness.❞ —Philippine Chamber of Commerce and Industry
BM Graphics: Ed Davad | Sources: PSA, DTI
US Tariff on PHL Exports
“The new 20-percent tariff imposed by the US on Philippine goods could exert downward pressure on FDI inflows for the remainder of the year.“ —Unionbank Chief Economist Ruben Carlo O. Asuncion
LABOR GROUPS FEAR LAYOFFS IN MANUFACTURING SECTOR By Justine Xyrah Garcia
L
ABOR groups on Thursday warned that the United States’s planned tariff hike on Philippine exports could trigger widespread layoffs and displacements, particularly in manufacturing and exportoriented sectors. The concern follows US President Donald Trump’s formal notification to President Ferdinand Marcos Jr. that the US will raise tariffs on Philippine goods from 17 percent to 20 percent starting August 1. Trump claimed the Philippines’s trade relationship with the US has been “far from reciprocal”
and poses a “major threat” to American economic and national security interests. In an interview with BusinessMirror, Sentro ng mga Nagkakaisang Manggagawa (Sentro) Secretary General Josua Mata said the new tariffs could have immediate repercussions for local firms supplying US-based brands. “Manufacturers supply ing US-based brands now risk being priced out of the market, as tariffs make their products significantly less competitive. That could lead to layoffs,” he explained. See “Labor,” A2
PADDLING INTO HEADWINDS A lone boatman paddles across Dagat-Dagatan in Caloocan on Thursday, July 10, 2025—his small vessel dwarfed by a wall of stacked containers. The scene mirrors the Philippines’ quiet struggle amid rising trade barriers, just as the United States confirmed a 20 percent tariff on Philippine exports. Signed by President Donald Trump on Wednesday, the letters impose new tariffs ranging from 20 percent to 30 percent on goods from the Philippines, Sri Lanka, Brunei, Algeria, Libya, Iraq, and Moldova, effective August 1. Presidential adviser Frederick Go, who also chairs the Economic Development Committee, will travel to Washington, D.C. next week in a bid to negotiate fairer terms for Philippine trade. NONOY LACZA
“The new 20-percent tariff imposed by the US on Philippine goods could exert downward pressure on FDI inflows for the remainder of the year,” Unionbank Chief Economist Ruben Carlo O. Asuncion told BusinessMirror. “The US is one of the Philippines’s key trading partners and a significant source of equity capital, accounting for 17 percent of placements year-to-date,” he added. Asuncion said a 20-percent tariff imposed on Philippine exports to the United States may dampen investor sentiment, particularly for the manufacturing sector. This, he added, will also reduce the profitability of US firms operating in the Philippines, which could cut into the reinvestment of their earnings, as well as cause a shift in investment strategies See “FDI,” A2
PESO EXCHANGE RATES n US 56.5710 n JAPAN 0.3867 n UK 76.8913 n HK 7.2071 n CHINA 7.8773 n SINGAPORE 44.1961 n AUSTRALIA 36.9691 n EU 66.3238 n KOREA 0.0412 n SAUDI ARABIA 15.0836 Source: BSP (July 10, 2025)