0.068% per $1
US tariffs increase for Philippine products
0.031% US tariff increase for Indonesian products
0.013% US tariff increase for Vietnam products
THE Philippines secured a less favorable tariff deal with the United States than Indonesia and Vietnam, underscoring a long-standing trend of the country reaping little from its special relationship with its American ally, according to a new report by the Philippine Institute for Development Studies (PIDS).
The July 22 agreement between US President Donald Trump and Philippine President Ferdinand Marcos Jr. set a 19-percent tariff rate on Philippine goods. This was a slight reduction from the 20-percent announced by Trump earlier in the month, but higher than the 17 percent rate the US had previously imposed in April.
PIDS researchers Josef Yap and Francis Mark Quimba said the Philippines effectively suffered a downgrade, as its pre-negotiation tariff was already lower than the final rate. In contrast, its regional peers saw their rates fall sharply from much higher starting points.
Measured in terms of improvement, the Philippines gained only 0.32 percentage points, while Indonesia gained 8.47 and Vietnam gained 12.15.
When adjusted for export size, the effective tariff increase for the Philippines was 0.068 per $1 billion in exports. This was more than double Indonesia’s 0.031 and over five times Vietnam’s 0.013, the study said.
The report also pointed out that Japan’s subsequent deal secured a 15-percent tariff, further underlining the Philippines’ weaker negotiating position.
“History shows that the Philippines has consistently yielded to US demands, yet has little to show for it,” the authors wrote, citing the country’s weaker export performance compared to Indonesia and Vietnam.
Business leaders previously cautioned against granting further concessions to the US.
Philippine Exporters Confederation Inc. president Sergio Ortiz-Luis Jr. stressed that the country had already given all it could.
Instead of reacting to Trump’s “unpredictability,” the PIDS paper urged the Philippines to craft a strategy that neutralizes it.
Recommendations included strengthening ASEAN coalitions, creating shared intelligence networks to decode sudden trade policy shifts, building alternative trade frameworks through RCEP and other partners and reducing reliance on US-dominated systems.
Domestically, the report recommended improving industry competitiveness, cutting non-tariff trade costs and leveraging cheaper U.S. imports for manufacturing inputs to expand production capacity.
The paper also advised sending a clear signal that unprincipled demands would be remembered in future negotiations and reminding Washington that undermining trade rules damages its own credibility.
