The Philippines is closely watching a pending US Supreme Court ruling that could determine the fate of new tariffs, with officials and industry leaders hoping for a decision that could ease pressure on local exporters.
The United States is the Philippines’ third-largest trading partner and top export market, with total two-way trade reaching $20.3 billion in 2025, Department of Trade and Industry Secretary Ma. Cristina Roque told senators during deliberations on her department’s proposed 2026 budget. The balance remains in the Philippines’ favor, with $4 billion.
That surplus is under threat. In August, Washington imposed reciprocal tariffs of at least 10 percent on 69 nations, alongside existing Section 232 duties on steel, copper, aluminum and autos. Investigations are pending for goods including trucks, aircraft, timber, pharmaceuticals, semiconductors and critical minerals.
“These developments highlight the urgency of strengthening Philippine industries and export sectors to stay competitive,” Roque said. The government is accelerating market diversification through free trade agreements (FTAs) with the United Arab Emirates, the European Union and Chile and is seeking entry into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Roque said talks with Washington are ongoing under the Framework on Reciprocal Trade, though both sides remain bound by a confidentiality agreement. The Philippines is pushing for a long-term bilateral trade deal while also negotiating exemptions for sensitive exports.
Frederick Go, who serves as the Special Assistant to the President for Investment and Economic Affairs, confirmed the government is seeking tariff shields for semiconductors and electronics—products not domestically produced in the US but critical to American supply chains.
“We’re working on getting several of our exports exempted. We’re hoping they view the work we do here as part of the production chain that they don’t want to do in America,” Go said, adding that local testing, assembly and packaging are functions US firms prefer to outsource.
He acknowledged, however, that the process has been slow. “Up to today, it’s still a gray space. We are still seeking clarification from the U.S. and lobbying for our semiconductor exports to be exempted if there is such,” Go said, noting that more than 150 countries are vying for similar relief.
Exporters warned of steep losses if the tariffs proceed. Philippine Exporters Confederation Inc. (PhilExport) president Sergio Ortiz-Luis Jr. cited a University of the Philippines Center for Integrated and Development Studies report that projected as much as $2.2 billion in lost revenues in the second half of 2025.
Labor-intensive exports such as garments, leather goods, wearables, furniture and corporate-based products would be hardest hit.
“While the export industry has shown remarkable growth, we are also mindful of the challenges ahead, particularly from tariff actions by the U.S. that cloud the global trade outlook,” Ortiz-Luis said.
He welcomed government initiatives to cushion the impact on micro, small and medium enterprises (MSMEs) through loans, new market access activities and an ambitious trade agenda that targets at least 13 FTAs by 2028.
Ortiz-Luis said President Ferdinand Marcos Jr.’s pledge in his State of the Nation Address to boost exports signals strong political will to scale up high-value sectors, from electronics and automotive to pharmaceuticals and agriculture.
“Does a silver bullet to exports exist? Yes, but it is forged, not found. It is built on world-class products, smart data, efficient systems, and, most importantly, partnership and collaboration,” he said.
Despite the uncertainty, both government and private sector leaders are focusing on resilience. The economy expanded by 5.5 percent in the first half of 2025, a performance Go called “remarkable in an environment of unpredictability.”
