The Philippine Economic Zone Authority (PEZA) sees an opportunity for local manufacturers to benefit from higher US tariffs on Chinese products under President Donald Trump’s administration.
“With China facing export restrictions due to high tariffs, this presents opportunities for those in manufacturing as well as those involved in the supply chain,” PEZA director-general Tereso Panga said in an industry forum on Feb. 14, 2025.
Panga said that in 2023, China exported around $436 billion worth of goods to the US. If the Philippines captures just 10 percent of that market—or about $43.6 billion—it could double the country’s ecozone exports to the US, he said.
Panga said this shift would not only impact the electronics sector, but could also extend to industries such as plastics, agriculture and chemicals.
He stressed the need for the Philippines to upgrade its capabilities and adapt to this evolving trade environment.
Panga said the second round of Trump policies is different from the first, particularly with the implementation of the CHIPS Act and the Industrial Technology and Semiconductor Initiative (ITSI) Fund.
Some American companies operating in the Philippines already secured ITSI funding, which Panga said would help strengthen the country’s electronics manufacturing supply chain.
“This will attract more investors and allow us to upgrade our EMS [electronics manufacturing services] supply chain, along with energy development and other key sectors,” he said.
He said it is unlikely the US will impose sectoral or universal tariffs on American companies with crucial backend operations in the Philippines, as this would be counterproductive.
To capitalize on these changes, Panga outlined key strategies for the Philippines, including tapping into new foreign direct investment sources, leveraging regional trade agreements like the Regional Comprehensive Economic Partnership (RCEP) and maximizing intra-ASEAN trade growth.
He also emphasized the potential of import substitution, where foreign companies operating in the Philippines can collaborate with local firms instead of solely sourcing from China.
“Instead of completely decoupling from China, we can learn from them and form partnerships,” Panga said.
