Finance Secretary Ralph Recto said the government is open to the possibility of implementing zero US tariffs on certain products ahead of negotiations between President Ferdinand Marcos Jr. and US President Donald Trump.
Recto, in a recent news briefing, said the zero tariffs would apply to a specific set of products that would have minimal impact on the country’s revenue.
“It’s small,” Recto said, referring to the potential revenue impact.
“We have a surplus with the US of roughly $5 billion,” he said.
Trump announced higher tariff rate of 20 percent on Philippine exports effective Aug. 1, 2025, compared to the 17 percent rate he said in April and the prevailing 10 percent. He said the US agreed to continue working with the Philippines, despite having a significant trade deficit.
“Our relationship has been, unfortunately, far from reciprocal. Starting on Aug. 1, 2025, we will charge the Philippines a tariff on only 20 percent on any and all Philippine products sent into the United States, separate from all sectoral tariffs,” Trum said in a letter to Marcos.
Trump also threatened to impose additional tariffs if the Philippines increased its own tariffs on US goods.
Recto said securing lower tariffs is part of the negotiating process, where the broader Philippines-US relationship, including security ties, can be considered.
“I think our relationship with the US is not only trade, but also security. And I’m sure they will be giving that some importance as well,” Recto said.
The government is pursuing free trade agreements (FTAs) with the US and other nations, he said.
“We prefer that. We want to have an FTA, not only with the US. but with Europe and many other countries,” Recto said.
“More trade should be better. We have to expand our markets. Get more investments in manufacturing, so that we can export more,” he said.
“We’re going to take a look at the final tariffs later on, what will be our advantages. Right now, not everything is clear yet,” said Recto.
FTAs are trade arrangements that allow free flow of goods and services across borders with minimal or zero tariffs, fostering closer economic ties and increased trade with partner countries.
