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Saturday, July 26, 2025 Vol. 20 No. 286
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THE PHL UMIC DREAM TURNS DILEMMATIC The Climb to UMIC
SUPREME COURT SHOCKER ON SONA’S EVE
$26 shortfall
AP/BASILIO SEPE
The Supreme Court on Friday unanimously declared unconstitutional the fourth Articles of Impeachment filed by the House of Representatives before the Senate against Vice President Sara Duterte for violating the oneyear-bar rule under the Constitution and her right to due process, sparking strong reactions from lawmakers in both chambers. Stories in A4 News.
BM Graphics: Ed Davad/Source: World Bank
GNI per capita (current US$), 2014-2024
ON TARIFF COUNTDOWN: T BALL ‘NOT IN OUR COURT’
By Jovee Marie N. Dela Cruz, Cai U. Ordinario, and Reine Juvierre S. Alberto
W
By Andrea E. San Juan
ITH only a week left before the implementation of the 19-percent tariff on Philippine goods entering the US, the Philippine team is still hoping to secure a lower rate while talks are still ongoing with Washington.
“For now, since it was already announced by President Trump, then it’s final. But of course, we’re really hoping we can [still] bring it down,” Trade and Industry Secretary Cristina A. Roque told reporters on the sidelines of the Department of Trade and Industry (DTI) National Trade Fair on Friday. “The ball is not in our court,” the Philippines’ Trade chief said as she explained that Washington set the tariff rate “not actually based on the trade deficit but on what America wanted to give us.” Nonetheless, the Philippine trade chief is still banking on the good outcome of the ongoing negotiations, given that there is still a week left before the August 1 implementation of the reciprocal tariffs for the US’ trading partners. “President Trump already announced the 19 percent in his tweet so we’re looking at that [19 percent], but of course they’re still talking until ano… of course everybody wants to bring it down,” Roque said. She confirmed to reporters that in securing the 19-percent country tariff, the Philippine side was asked by Washington to offer all products to the US, meaning to allow entry of US-made goods to Philippine borders at zero tariffs. Roque said, however, that the Philippines did not agree to grant the US full access as this might hurt local producers, particularly the agriculture sector. “For us, we did not give the agriculture because it might hurt the farmers. It might hurt that industry,” she pointed out. Roque said, however, that the Philippine team has already laid down all concessions on the negotiating table. “That’s the best we can give,” she said. But the trade chief asserted: “We definitely negotiated. But then, in the end, it’s really up to them.” Among the sectors excluded
“That’s the best we can give. We definitely negotiated. But then, in the end, it’s really up to them.”— Trade and Industry Secretary Cristina Roque, on the Philippines’ final tariff offer to the US, ahead of the planned 19% tariff set to take effect August 1.
from the list of concessions were agricultural products such as sugar, corn, rice, poultry, pork, and seafoods, which are locally produced in significant volumes. Special Assistant to the President for Investment and Economic Affairs (SAPIEA) Frederick Go said they opted to remove the tariff for soy, wheat, medicines, and automobiles as part of their concessions to the US so it would lower its 20-percent tariff on Philippine goods by one percentage point, since those goods are not produced locally. The zero-tariff regime, he said, will be beneficial for consumers, since they will have access to cheaper medicine, bread, and animal feeds. Meanwhile, Roque said DTI is preparing measures for the industries that might be affected with the upcoming implementation of the additional tariffs on Philippine goods entering the US. “Yes, of course. This is what I always say: Never put our eggs in one basket. I mean the US is one market but we have the whole world as the entire market,” she emphasized. “We cannot just rely on one. [What’s important is that] the world should be our market, we should be supplying to the world so
U.S. President Donald Trump meets with Philippine President Ferdinand Marcos Jr. in the Oval Office of the White House on Tuesday, July 22, 2025, in Washington. The two leaders discussed a proposed trade deal that would allow US exports to the Philippines to enter duty-free, while Philippine goods would face a 19% tariff. AP/ALEX BRANDON
that if anything happens to one, we still have so many fallbacks,” the Trade chief added.
PCCI: ‘Not a game changer’
MEANWHILE, in a separate statement on Friday, the Philippine Chamber of Commerce and Industry (PCCI), the largest business organization in the country, said the government should shift its attention to “more significant obstacles” hounding the domestic business and trade environment than the 1-percentage point cut in the tariff, which it said is “not a game-changer.” “Every percentage point counts,” PCCI President Enunina Mangio said this in a statement on Friday, pointing out that while a 1-percentage point is “modest,” she said this translates directly to lower costs of Philippine products in the US market compared to those of other countries that are facing steeper tariffs. Mangio said this reduction in the tariff that would be slapped on Philippine goods “provides exporters a bit more flexibility in pricing negotiations; and, particularly for micro, small, and medium enterprises (MSMEs), can translate to
meaningful cost savings, stronger profit margins, and improved price competitiveness.” “Realistically speaking, a 1 [percentage point] reduction is unlikely to trigger a massive surge in exports. The impact will be most felt by specific industries already exporting the affected goods,” Mangio said. PCCI emphasized that “broader factors” like overall economic demand, global competition, logistics costs, production challenges (infrastructure, input costs, bureaucratic efficiency), and non-tariff barriers (NTBs) often have a far greater impact on export volumes than a single percentage point tariff change. PCCI called on the government “to continue efforts to negotiate deeper and more comprehensive tariff relief across a wider range of product lines, as well as to address NTBs and to aggressively implement domestic reforms to improve doing business and trade, lower logistics and energy costs, promote digital infrastructure and provide international trade incentives to strengthen competitiveness, improve productivity and build a resilient and inclusive economy.”
HE Philippines is now just $26 away from joining the ranks of upper middle-income countries (UMIC). The realization of this dream has eluded the Philippines for the past 38 years. Despite the long wait, the Philippines soldiers on, as becoming a UMIC promises higher national wealth and better lives for more Filipinos. According to the World Bank’s latest classification, the Philippines’ gross national income (GNI) per capita stands at $4,470—just $26 short of the UMIC threshold of $4,496. With this comes the reality that UMICs have limited access to concessional financing from multilateral, regional, and bilateral organizations. Former Socioeconomic Planning Secretary Dante B. Canlas told BusinessMirror that preparing to become a UMIC starts with the government becoming more judicious about their spending. While the UMIC status was merely a “statistical construct” and some observers do not agree with the categorization, it still considers a country’s fiscal health and macroeconomic stability, according to Canlas. “As the Philippine income status rises, tapping global financial markets in borrowing involves paying near market interest rates. But it should be manageable if the Philippine capacity for debt servicing also gets stronger,” Canlas said. “[The government should] prioritize tax and non-tax revenue measures, and cut wasteful government spending.” Unfortunately, economist and former Albay Representative Joey Sarte Salceda said traditional tax reforms may prove politically difficult in the current climate. With this, Salceda emphasized that the legislative focus must now shift to the expenditure side—ensuring every peso delivers measurable impact. “There’s low public appetite for new taxes,” he explained. “That means we must improve the quality and speed of government spending. Fix procurement, enhance agency absorptive capacity, and accelerate big-ticket and PPP [Public Private Partnership] pipeline projects.” To cushion the impact of reduced concessional lending and build long-term financial resilience as the Philippines approaches upper middle-income status, Speaker Martin Romualdez laid out a comprehensive portfolio of economic and social reforms. At the forefront is the Budget Modernization Act, which seeks to create a more transparent and results-oriented budgeting process. The measure prioritizes efficiency, accountability, and the timely delivery of public services—crucial for maximizing limited fiscal space. The measure proposes a shift to a cash-based budgeting system, real-time tracking of public expenditures, and a digital financial management framework. “Every centavo in the national budget comes from the people. It must be used quickly, honestly, and with clear results,” Romualdez said. Continued on A2
TAP AT TURNSTILE, TAKE THE TRAIN Transportation Secretary Vince Dizon tries out
the GCash QR code payment system at the MRT Ayala Station in Makati City on Friday, July 25, 2025. Passengers may now conveniently tap their GCash, Mastercard, or Visa cards at station turnstiles, a move aligned with the government’s push to modernize and streamline public transportation. Dizon also revealed a new collaboration with the Department of Information and Communications Technology (DICT) to provide free Wi-Fi access across all MRT stations. NONOY LACZA
PESO EXCHANGE RATES n US 56.6650 n JAPAN 0.3853 n UK 76.5657 n HK 7.2190 n CHINA 7.9189 n SINGAPORE 44.3562 n AUSTRALIA 37.3422 n EU 66.5700 n KOREA 0.0413 n SAUDI ARABIA 15.1050 Source: BSP (July 25, 2025)