As President Ferdinand Marcos Jr. embarks on a crucial mission to renegotiate the 20-percent US tariff on Philippine exports, an industry group urged him on Monday to leverage the country’s strategic importance and longstanding alliance with the United States.
Philippine Exporters Confederation Inc. (PhilExport) president Sergio Ortiz-Luis Jr., in a televised interview, called on the President to make a strong case for tariff relief and increased government backing for the sector.
“We were okay with the 17-percent tariff because our competitors were still taxed higher. But when the Philippines was slapped with a 3-percentage-point increase, the biggest hike among all countries, it sent a very bad signal,” Ortiz-Luis said.
“Worse, Vietnam, which used to pay 46 percent, was brought down to our level at 20 percent. That undermines our position entirely,” he said.
Ortiz-Luis said other Southeast Asian exporters such as Thailand and Malaysia have been able to negotiate better terms with the US, leaving the Philippines behind.
He said the US may be using tariffs not just for trade balancing but as a geopolitical weapon, an approach he said was already evident in President Donald Trump’s previous statements and policies.
While Finance Secretary Ralph Recto signaled a willingness to lower duties on select American goods in exchange for better tariff rates, Ortiz-Luis warned of possible blowback from other trading partners.
“We’re a small player in US trade. Our exports to them are barely 1 percent of their total imports, and mostly electronics,” Ortiz-Luis said. “If we lower our duties for the US, what will China or others expect?”
The long-time export advocate also cautioned against sacrificing local agriculture, noting that lowering tariffs on American farm products could overwhelm the local market and severely impact Filipino farmers.
Although the full impact of the 20-percent tariff has yet to be felt in the second half of 2025, Ortiz-Luis said early warning signs have emerged.
He cited instances of cancelled and delayed orders, as exporters worry that competing countries may soon enjoy even lower tariffs while the Philippines remains at a disadvantage.
Ortiz-Luis pointed to a deeper problem, citing years of neglect and underinvestment in export development, noting that even the well-crafted Export Development Plan (EDP) remains shelved today due to lack of funding.
Ortiz-Luis said just a fraction of the government’s existing allocation, such as the P15 billion budgeted just for monitoring conditional cash transfers, could be redirected to export development and produce long-term economic benefits.
“Give 10 percent of what you’re giving away elsewhere, and consider it an investment, not an expense,” he said. “We’ll gain more jobs and more sustainable growth.”
