THE GOVERNMENT needs to keep pace with the trade concessions offered to the US by regional competitors like Vietnam, according to Alfredo S. Panlilio, president of the Management Association of the Philippines (MAP).
“The government has a role to play in terms of sitting down with the US, and I think Vietnam has done the same. The US imposed a high tariff, but they sat down — and I think now it’s down to zero,” Mr. Panlilio told BusinessWorld during the BusinessWorld Economic Forum last week.
The government should also see its role as “ensuring that businesses are less impacted by these tariffs,” he said.
Last month, US President Donald J. Trump imposed reciprocal tariffs on most trading partners, with the Philippines assigned a 17% rate, second lowest in Southeast Asia.
Most other Southeast Asian economies were initially charged 24% to 49%, pending negotiations. Only Singapore was assigned the “baseline” tariff of 10%, typically reserved for economies deemed to be pursuing the most open trade policy with the US.
The reciprocal tariffs were later paused until July, but a baseline 10% tariff remains in effect on most trading partners pending the outcome of negotiations with Washington.
Ruben J. Pascual, secretary general of the Philippine Chamber of Commerce and Industry said the 17% reciprocal tariff imposed on the Philippines should be an advantage, but the government is not leveraging it enough.
“Those reciprocal tariffs… put us in an advantageous position against our neighbors, who are our competitors in many industries,” Mr. Pascual told BusinessWorld during the same event.“We’re shooting ourselves in the foot by not taking advantage of this.”
Mr. Pascual said that the government must look ‘very carefully’ at its trade policy and closely monitor the central bank’s interest rate settings.
He noted that with the peso strengthening, the government can guide the exchange rate to favorable levels for exporters.
“These are the things we are closely watching to ensure that all these policies work in tandem and that there is a cohesive strategy — both economic and monetary policy — as well as a focus on domestic growth alongside global integration,” he said.
Earlier this month, the Philippine delegates, led by Secretary Frederick D. Go, Special Assistant to the President for Investment and Economic Affairs, flew to Washington for tariff talks.
Mr. Go said in a statement after returning that the talks “went very well,” with the interests of both sides put forward. — Edg Adrian A. Eva