The Philippine Exporters Confederation Inc. (Philexport) said US President Donald Trump’s decision to pause reciprocal tariffs with its trading partners for 90 days has only made the situation more “unpredictable.”
In an interview, Philexport president Sergio Ortiz-Luis Jr. said the uncertainty fueled by the imposition of the reciprocal tariffs only worsened the already prevailing uncertainty in global trade.
“The situation has all the more become unpredictable. It adds to the uncertainties,” Ortiz-Luis said.
He said some exporters are going about their business “like usual” but with caution that prices can change at any time.
In general, most exporters are waiting and watching, although the group is maintaining its export goal of $110 billion for the year, he said.
The Department of Trade and Industry has reported full-year total exports of goods and services amounted to $103.6 billion in 2024, a 4.8 percent increase from the previous year.
Ortiz-Luis said, “We have to watch out for what our competitors can actually offer to US buyers. At the moment, the situation is very fluid.”
The Philexport chief said it is “too early” for the Philippines to discuss providing concessions under a preferential trade scheme with the US because “we don’t know what the actual tariffs would be” after 90 days.
Time to negotiate–economist
However, Michael Ricafort, chief economist at RCBC, took a different view from that of the exporters’ group.
In a text message, Ricafort said Trump’s 90-day pause could give the Philippines time to negotiate for a tariff reduction.
Ricafort said even a baseline tariff of 10 percent for the next three months would adversely affect Philippine exports.
“The US will be very busy negotiating with many countries to reduce reciprocal tariffs amid the 90-day relief. (It’s) time for the Philippines and other countries to negotiate for reduced tariffs with the US,” he said.
Ricafort said Philippine exports are not that huge compared with those of other countries in Asean and Asia, so that the adverse impact on the Philippines by the US tariffs is more limited as additional tax could be passed on to buyers, or absorbed, depending on the competition.
“(There will) still be some adverse impact on Philippine exports, though mitigated (with the pause),” he said.
Ricafort said the impact will be more bearable than the higher US import tariffs/reciprocal tariffs on other countries, especially China’s 125 percent.
Impact on growth
Commenting on the 0.1 percent GDP impact on economic growth, Ricafort agreed that this level will have a “limited drag on Philippine GDP, as the Philippine economy is less reliant on exports as a source of economic growth.”
Philippine merchandise exports are three to five times lower than those of major Asean countries every year, he said.
However, he warned of slower world economic growth due to Trump’s higher US import tariffs and other protectionist measures, which could also indirectly weigh on the Philippine economy.
Global effects
From a global perspective, Ricafort said a much lower 10 percent baseline US import tariff rate for exports from many countries would somewhat mitigate US inflationary pressures than the previous higher reciprocal tariffs announced on April 2.
“However, the large 125 percent US import tariff on China, which is the world’s second-biggest economy, would still lead to higher US import prices paid for goods from China by US consumers, businesses, and other institutions.
Ricafort said the retaliatory tariffs between the US and China would lead to higher costs/prices for US imports from China (+125 percent ) and also for China imports from the US (+84 percent), thereby directly and indirectly leading to higher input costs for products from the US and China. He said this could be exported to other countries and supply chains globally.
