Finance Secretary Ralph Recto is confident the country has a strong “game plan” in its negotiations for the reduction of the impending 20 percent US tariffs on Philippine exports.
These new duties will take effect in less than two weeks.
Recto, with Trade Secretary Cristina Roque and Economic Planning Secretary Arsenio Balisacan, has finetuned their approach to convince US officials to lower the rates.
“We already have a game plan,” Recto told reporters.
The 20 percent US tariff is up from the previously announced 17 percent. The increased rate takes effect August 1, 2025.
President Marcos himself flew to Washington, D.C., on Sunday for a two-day visit. Before departing, he described the 20 percent tariffs as “severe.”
The US government has not explained the rate hike. However, some credit rating agencies suggest negotiations could yield a 10 percent percent baseline.
Recto stated they would even push for zero tariffs on some items. “Definitely, not for all products, but we’ve identified certain products,” he said. These could include agricultural and mass-produced manufactured goods.
He noted US tariffs have minimal impact on the country’s revenues. Recto did not provide specific figure.
Last year, the Philippines recorded a $5 billion trade surplus with the US.
US Trade Representative data showed US-Philippine goods trade reached $23.5 billion in 2024. The Philippines exported $14.2 billion and imported $9.3 billion. The US goods trade deficit with the Philippines expanded by 21.8 percent from 2023.
“We want to reduce whatever duties they will impose,” Recto affirmed.
The Finance official expressed confidence in the long-standing trade relationship. He believes it will benefit the Philippine delegation.
“Our relationship with the US is not only trade, but also security,” he emphasized.
However, Recto acknowledged the 20 percent tariff could impact credit ratings. “Anything is possible,” he said. “Credit rating is more fiscal. But there’s an effect because of growth.”
Still, Recto believes a 20 percent US tariff would not “too much affect” the GDP. Its impact depends on tariffs imposed on other nations like China.
The Philippines recently downgraded its 2025 GDP growth forecast. It now expects 5.5 percent to 6.5 percent, down from 6 percent to 6.5 percent.
First-quarter GDP growth for this year registered 5.4 percent. This was lower than 5.9 percent in the same period of 2024.
