The Philippines can lose no less than $ 1.89 billion (P107.6 billion) in the export of mainly mechanical and electrical equipmentment in the US as President Donald J. Trump makes up for his threat to impose higher rates, according to a think tank from the House of Representatives.
The amount could fall to a net loss of $ 1.6 billion due to the so -called trade diversion payments, said the congress policy and the budget investigation department (CPBRD) in a report released this month.
“A common characteristic of these products is that they are currently benefiting from minimal to zero American rates, making them particularly vulnerable to imposing higher tasks,” said CPBRD authors Mark Carmelo R. Manguera and Dawndale Albert O. Tanilon in 38 Pages Discussion Document.
The CPBRD report investigated the potential impact of the US Tariff statements on the Philippines under a second Trump administration.
The United States were the best destination for Filipino goods in 2024, with exports with a value of $ 12.12 billion or 16.6% of total export sales.
According to the CPBRD, the majority of Filipino export products that are expected to have negative net trade effects as a result of higher American tasks.
It noted that eight out of 10 sectors fall within the mechanical and electrical machines, equipment and parts category, while the remaining sectors – shellfish and molluscs, and coconut and palm kernel oil are classified as primary raw materials.
Mr. Trump, who took office on January 20, has already made an extra rate of 10% on Chinese goods, but has postponed a rate of 25% on goods from Mexico and Canada for a month. This is part of its broader trade policy for ‘America First’ that gives US economic interests priority.
Mr. Trump has also threatened to impose mutual rates on every country that determines tasks about the entry of the US, a movement that would influence the Philippines.
“The most important decrease in Filipino exports is projected for discs, tires, non-fugitive non-fighter storage devices, smart cards and other media for the absorption of noise or other phenomena, with a reduction of $ 386.7 million,” said.
The Filipino export of coconut and Palm Kernel is expected to fall by $ 374.5 million, while the export of automatic data processing machines will fall by $ 187.6 million.
The export of electronic machines, in particular electrical transformers, static converters and inductors, would also fall by $ 143.5 million.
Filipino export of telephone sets, including smartphones and other transmission networks, It is expected that will fall by $ 130 million.
“Other products that are strongly affected by the American rates are in electronic integrated circuits ($ 97.82 million); machine parts and accessories ($ 77 million); insulated wire, cable, other electric conductors and optical fiber cables ($ 74 million); monitors and projectors ($ 64 million); And shellfish, molluscs and other invertebrates ($ 63 million), “said the CPBRD.
Positive effects
On the other hand, the CPBRD said that there can be positive trade turns effects for certain export products, such as clothing and footwear.
“This is reminiscent of the ‘bystander effect’ during the trade collision of the US-China, where some third countries were able to take advantage of shifts in trade dynamics … In terms of value, however, the net trading profits are relatively modest, “it said.
The greatest expected positive net trade effect for the Philippines is in lasers, which is expected to jump by $ 37.3 million, while the export of seat components is expected to rise by $ 18.2 million.
Trade in Filipino suits, jackets, pants and dresses can increase by $ 17.3 million, while casual clothing products, such as sweaters and vests can jump with $ 17 million.
Women’s clothing, such as skirts and pants, could also see an increase of $ 13 million.
Other product categories that are expected to be expected are knitted or crocheted items of clothing ($ 12.79 million); cement, concrete or artificial stone ($ 12.73 million); Men’s suits, ensembles, jackets, blazers, pants, bib and bracket overalls, riding pants and shorts ($ 12.52 million); festive, carnival or other entertainment items ($ 11.8 million); and Electro magnets ($ 10.93 million).
“To navigate through the challenges of possible changes in the US rate policy, the Philippines must tackle both immediate and long -term barriers. Diversity of export markets by strengthening trade relations with alternative countries can reduce dependence on the US, while pursuing preferential access to the American market can help support existing trade flows, “said the CPBRD.
The Philippines should also try to minimize the adverse effects of American rates by exploring new markets and “taking advantage of trade deviation, especially from China, India and Indonesia,” it added.
“For the top five products that would be negatively influenced by the US Tariff statements, China, Hong Kong and Germany are emerging as prominent global importers,” said the CPBRD, referring to disks; coconut; Automatic data processing machines; electrical transformers; And telephone sets.
“By concentrating on these markets, the Philippines can strengthen trade and investment missions and investigate opportunities to negotiate trade agreements, improving access and competitiveness in these markets.”
The CPBRD said that the Philippines must also “intensify negotiations” with the US for the re -authorization of its generalized system of preferences (SAP).
“The herauthorization of the GSP would effectively protect covered products against the rates that would be imposed by the US,” said it.
The think tank said that the government should also use Republic ACT No. 11981, or the Tatak Pinoy (proud Filipino) law, which aims to improve the position of the country in the global value chain by encouraging companies to encourage quality products.
“An opportunity for the country lies in the timely and effective formulation and implementation of the Tatak Pinoy strategy … The aim is to identify target sectors and usable measures for domestic industries to produce and handle more diverse and advanced products and services Bidding, “said it.
The Philippines can further insulate its economy by forging more free trade agreements with Canada, Europe and countries in the middle, said Calixto V. Chikiamco, president of Foundation for Economic Freedom, in a Viber -messy.
“It is possible [also] Focus on goods such as minerals that the US needs and therefore cannot be subjected to rates, “he added.
Mr. Trump’s tariff plans offer the Philippines the opportunity to build the production -industry, said Leonardo A. Lanzona, professor of economics at Ateneneo de Manila University, in a viber -mess.
The State must now take a serious account of a “National Industrialization Policy” and streamlining investments guided by the State in the establishment of nickel processing factories and factories of renewable energy technology, said Jose Enrique “Sonny” Africa, executive director at Think Tank Ibon Foundation, in in A Viber message. – Kenneth Christiane L. Basilio