Economic analysts agreed with a government view that Philippine industries must diversify their export markets and avoid overreliance on a single market such as the United States to cushion the impact of a global tariff war.
They also urge the country’s exporters and policy makers to take advantage of a number of free trade agreements (FTAs) with relatively low tariff rates.
John Paolo Rivera, senior research fellow at the Philippine Institute of Development Studies, said diversification of export markets has now become a critical strategy under the current global trade environment.
‘Avoid over-reliance’
“With the US imposing higher tariffs, Philippine exporters must avoid over-reliance on a single market,” he said.
Rivera said the Philippines should now intensify its engagement with fast-growing economies in Asean, the Middle East, and the European Union (EU).
The Philippines should also maximize preferential access under its agreements, such as the Regional Comprehensive Economic Cooperation (RCEP) and the Generalized System of Preferences (GSP) Plus with the EU, which imposes zero rate on more than 6,000 tariff lines of Philippine exports, he said.
For the key export products, Rivera sought to upgrade the competitive edge and innovation capacity of agribusiness, electronics, garments, and digital services.
Free trade agreements
In a separate interview, Michael Ricafort, chief economist at the Rizal
Commercial Banking Corp., said the Philippines has many FTAs with Asia-Pacific countries that may be tapped to diversify Philippine exports.
RCEP groups together 15 Asia-Pacific nations, including the 10 members of Asean, Australia, China, Japan, South Korea and New Zealand.
Ricafort said the Philippines should tap more markets in the Middle East, Europe, and the Americas.
He added that Philippine export winners, such as agricultural exports—tropical fruits and coconut oil—could also increase the share of their exports to these markets.
“It is best to diversify export markets to more countries and export products other than electronics,” he added.
United States Trade Representative data show the US was the country’s top export market in 2024, and the Philippines shipped $12.14 billion, or 16.6 percent of the country’s total export sales, amounting to $73.27 billion.
The Philippines’ top five major trading partners in 2024 were Japan, $10.33 billion (14.1 percent); Hong Kong, $9.61 billion (13.1 percent); People’s Republic of China, $9.44 billion (12.9 percent); and Republic of Korea, $3.57 billion (4.9 percent).
Electronics was the top export in 2024 at $39 billion followed by other manufactured goods, $4.68 billion; other minerals, $3 billion; ignition wiring sets, $2.45 billion and coconut oil, $2.2 billion.
More trade meetings under way
The Philippines expects another round of negotiation with the US on the reciprocal tariffs, the DTI said.
“Negotiation is a process. (It is) Not a one-time meeting,” DTI Secretary Ma. Cristina Roque said in a text message.
The second round of meetings follows the May 2 negotiations held between the US trade officials and the Philippine team, which included Roque, Special Assistant to the President for Investment and Economic Affairs Frederick Go, Secretary and Philippine Ambassador to the US Manuel Romualdez.
Go said earlier the meeting “went very well.” The Filipino negotiating team said in a statement on Sunday, “The discussions mark the beginning of a process toward arrangements from both sides that will not only strengthen US-Philippines trade ties but also help diversify our country’s export markets.”
