The best approach that the Philippines should take in its negotiations with the United States should run on two tracks, allowing it to strike a balance between urgency and strategic positioning, analysts said.
The two-track approach includes tariff cuts and a free-trade arrangement between the two allied countries, the analysts interviewed on Monday said.
Philippine negotiators, led by Special Assistant to the President on Economic Affairs Frederick Go and Trade Secretary Cristina Roque, have departed for the US to start the negotiations with the US.
Washington announced last week the imposition of a 20 percent tariff on Philippine products, effective August 1.
One of the analysts, John Paolo Rivera, a research fellow at the Philippine Institute for Development Studies, said the Philippine strategy should consider both the short term and the medium to long term.
Quick relief
Rivera said for the short term, the negotiators could focus on country-specific lower tariff rates and carve-outs for vulnerable sectors, such as garments, electronics and agriculture.
“These deliver quicker relief and protect jobs,” Rivera said.
For the medium to long term, Rivera suggested that the Philippines should initiate formal dialogues on a bilateral free trade agreement or an enhanced trade framework with the US, particularly in areas such as digital trade, critical minerals and green supply chains.
Marites Agoncillo, executive director of the Confederation of Wearables Exporters of the Philippine (Conwep), said the garment sector acknowledges the challenges of a sector-specific preferential arrangement with the US in this round of talks.
Agoncillo said that in the first round, the group had urged the Philippine negotiating panel to “carve out” garments from the discussions by seeking sector-specific preferences.
“We will be waiting for the results. It really depends on the DTI on how they will negotiate. We can’t ask for anything except a lower country-specific tariff. It might be hard to ask for a sector-specific concession at this time,” Agoncillo said.
Garments relief viable
However, Rivera said carve-outs can be pursued, as they are common in trade diplomacy, especially for labor-intensive, export-driven sectors such as the garment industry.
He said the Philippines can justify this by highlighting the industry’s role in job generation and its participation in the US supply chain.
“If positioned well, a garment-specific relief package is still viable, particularly if tied to commitments on labor standards and sustainability,” he added.
FTA a long game
Rivera said an FTA is a long game that requires lengthy negotiations, legislative backing and alignment with US strategic and economic interests.
Rivera said that while it is a worthy goal, it would not solve the immediate pressure from the 20 percent tariff. “That is why sectoral carve-outs and country-specific tariff relief are more urgent and realistic in the short term,” he added.
Michael Ricafort, chief economist at the Rizal Commercial Banking Corp., agrees with Rivera, saying trade talks toward an FTA would take some time and require legislation.
Ricafort said the Philippines, like many countries, is facing the same problem of how to lower the country-level tariff, given the deadline on Aug. 1, 2025.
“A diplomatic or non-retaliatory approach is recommended, though a positive outcome is not guaranteed. This is still uncertain, and largely a discretion of (US President Donald) Trump,” he added.
Prior to the US notice of a 20-percent tariff, Conwep had cautioned that apparel, travel goods, and shoes would be affected by the US tariffs under a 17 percent rate.
In a position paper issued in a May 26, 2025 forum, the group said articles of apparel, particularly jeans, pants, and suits, will be hit the hardest at a 17 percent tariff since these products were already slapped with duties as much as 32 percent.
An update on that position paper is not available, Conwep said.
Chapters 61 and 62 of the US tariff book, which cover pants, jeans, and suits, combined, cover 2,589 tariff lines or 44 percent of the 5,815 tariff lines that Conwep members export to the US.
Agoncillo, on May 27, 2025, was quoted by the Malaya Business Insight as saying that before the April 2 announcement, shoes were slapped with a 10 to 15 percent tax and bags, a 10 to 20 percent tax.
On March 31, 2025, MBI quoted Agoncillo as saying the US accounts for about 72 percent of Conwep’s exports.
Total wearable exports amounted to $1.299 billion in 2024, down 4 percent from $1.35 billion in 2023, Conwep data showed.
