The Philippine Economic Zone Authority (PEZA) expressed confidence in the country’s resilience to potential US tariff hikes under the second Trump administration.
“The Philippines’ negligible trade deficit with the US compared to other major economies in the region provides a significant buffer against potential US tariff hikes,” said PEZA director-general Tereso Panga.
Panga said that within the China+ASEAN 6 trading bloc, the Philippines has the least trade surplus with the US at $4 billion in 2023, compared to Thailand’s $43 billion, Vietnam’s $109 billion and China’s $300 billion.
Panga also emphasized the importance of the Philippine electronics and semiconductor manufacturing services (EMS-SMS) sector, which constitutes a significant portion of the country’s exports to the US.
He acknowledged concerns about the potential impact of tariffs on this sector. Panga said one of the sector’s concerns is whether the Philippine EMS-SMS exports to the US would be covered by the planned tariff hikes.
Another concern, he said, is whether the Philippines would benefit from the increased US import tariffs on exports of EMS-SMS products by China, Mexico and Vietnam, the leading offshore sites by many global export producers and industry leaders.
PEZA also expressed concerns if ‘America First policy’ would erode the Philippines’ and other ASEAN economies’ ability to attract more US investments and exports.
Panga said other countries also raised similar concerns at the recent Annual World Electronics Forum Breakfast Session in Las Vegas.
He, however, highlighted potential opportunities for the Philippines, given the trade shifts that could position the Philippines as a cost-effective alternative for off-shore manufacturing/ally shoring for American and other MNCs.
PEZA hosts 482 EMS-SMS companies, many of which are American companies.
