PH faces up to P6B in annual foregone revenues from US market access

The Philippines is estimated to incur up to P6 billion in foregone revenues each year from the markets it will open to the United States with zero tariffs under the latest trade agreement between the two countries, Finance Secretary Ralph Recto said Tuesday.

According to Recto, the foregone revenues cover those collected from the importation of products that the Philippines has agreed to open to the US, which would ultimately benefit Filipino consumers.

“Unang estimate natin is P3 (billion) to P6 billion a year, depende kung lahat ‘yan. Remember there’s nothing final yet,” he told reporters on the sidelines of the Post-SONA Discussions in San Juan City.

“Assuming ibigay mo what we discussed with them like cars, soys, wheat, pharmaceuticals, soybeans, anywhere from P3 to P6 billion, pero wala pang final lahat ‘yan,” he added.

(Our initial estimate is P3 to P6 billion a year, depending on the scope. Remember, there’s nothing final yet. Assuming we grant what we discussed with them like cars, soys, wheat, pharmaceuticals, soybeans, anywhere from P3 to P6 billion but none of that is final yet.)

Just last week, US President Donald Trump announced a new 19% tariff rate for Philippine goods. This is lower than the 20% announced in a letter earlier this month, but higher than the 17% rate announced during the Liberation Day Tariffs in April.

Posting on his Truth Social media platform, Trump initially said the Philippines is going open market with the United States with zero tariffs, while the Philippines would pay a 19% tariff.

President Ferdinand “Bongbong” Marcos Jr., who had a meeting with Trump before the 19% rate was announced, has since clarified that the zero tariffs on US products would only apply to certain markets such as automobiles.

“Not all imports will go down, so hihingin natin (so we will ask), especially those that do not compete with local industries and beneficial to consumers,” Recto said.

Overall, Recto said the 19% rate on Philippine exports is still beneficial to the country, given its comparative advantage to other countries that have been slapped with higher rates.

“We have one of the lowest tariffs in the world if you take a look, so beneficial sa atin dun (so that’s beneficial for us). Siyempre tatamaan din ‘yung exports natin (Of course, our exports will be hit) initially, but as a whole, it looks like we have a better deal than many other countries,” he said.

Economists earlier said the latest agreement will only have a limited impact on the country’s economy given its low dependence on American demand compared with other Asian economies, with local exporters bearing the brunt. — RSJ, GMA Integrated News