US tariff uncertainty drives PH to seek new export markets

The global tariffs imposed by the United States have made it clear that the Philippines must expand and diversify its export base, even as the country is still in a “good spot,” Finance Secretary Frederick Go said.

For her part, Trade Secretary Cristina Roque said trade officials remain “in talks” with their American counterparts after US President Donald Trump had raised global tariffs to 15 percent from 10 percent a day earlier.

But Roque added that the Department of Trade and Industry (DTI) has “no plans of going back” to Washington for now, as the Philippines focuses on hosting this year’s Association of Southeast Asian Nations Summit (Asean).

“We haven’t spoken about it yet. But definitely, if there are changes, we will really sit down,” she told reporters on Tuesday.

In his speech during the Asean Editors and Economic Opinion Leaders Forum, Go said, “We have to create new markets for the Philippines to trade with, to sell to, which is why the activities being engaged in by our economic team—signing more economic partnership agreements and free trade agreements—are really important for our industries to be able to grow.”

Still, Go told reporters that the country remains in a “good spot,” noting that the majority of Philippine semiconductor and key agricultural exports have long been exempted from the tariffs prior to the US Supreme Court decision to strike down most of Trump’s tariffs.

The semiconductor industry, which Go described as the country’s “bread and butter,” continues to attract investments.

“A lot of good news here. We continue to receive a lot of international semiconductor firms and electronic firms that continue to expand in the Philippines or enter the Philippines for the first time,” Go said.

The finance chief also said that an undisclosed company is currently in talks with the DTI to register the manufacture of electric vehicles in the country.

Roque confirmed that discussions are progressing well and that the government expects to secure the substantial investment within the year.

Beyond manufacturing, Go said the government is also looking to revitalize the coconut industry through the P80-billion Coconut Farmers and Industry Trust Fund, commonly known as the coconut levy fund.

Lastly, Go said the Philippines is aiming to conclude a free trade agreement with the European Union this year.

Jittery exporters

Reacting to Go’s remarks, Dan Roces, group economist at SM Investments Corp., said: “In order for an economy to be competitive, we need to be able to develop the market. We agree with that statement, that we have to develop more manufacturing.”

“But that’s the easy part. The other part will be looking for the markets. We have the capacity, but we also have to develop the markets,” he added.

Local exporters, however, lament the renewed uncertainty.

“We were happy with the 10 percent because basically, we will still be competitive,” said Sergio Ortiz-Luis Jr., president of the Philippine Exporters Confederation Inc. (Philexport). “Unfortunately, the 15 percent, I’m not so sure whether there will be some adjustment in the supply chains and markets.”

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Without these exemptions, Ortiz-Luis said the Philippines may have been better off under the earlier 19-percent “reciprocal” tariff because of the scope of goods that had been spared from that levy.

Ortiz-Luis, whose group represents the country’s largest umbrella organization of exporters, said exemptions had been a key advantage for the Philippines and had helped ease concerns among major exporters.

Philippine shipments to the United States reached $13.44 billion in 2025, down from $14.5 billion in 2024, but still accounting for 15.9 percent of the country’s total exports.

About $6.8 billion worth of goods were exempted from the levy, largely electronics, along with more than $1 billion in agricultural products.

Ortiz-Luis expressed concern that some electronics companies might start to leave. At 15-percent tariff, he said a supplier or a buyer might have a change of heart.

Ortiz-Luis doubts whether the US Congress will ultimately sustain the new levies. He expects further scrutiny by the US Supreme Court.

Within the 150-day window, Ortiz-Luis said Philippine exports would likely continue, but under what he described as an unusually volatile and uncertain policy environment.

“It depends on how he wakes up,” Ortiz-Luis said of Trump’s tariff policy. “It’s really more uncertainty.”