Finance Secretary Ralph G. Recto has underscored that the Philippine economy remains relatively resilient amid global trade shifts, with the government leveraging the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act to attract more investors to locate in the country.
“The Philippine economy is primarily driven by domestic demand rather than exports. This makes us relatively resilient against trade wars. However, as with all countries, we are not spared from the impact of the expected decline in international trade and possible slowdown of global growth due to supply chain disruptions, higher interest rates, and higher inflation,” the Finance Chief said.
“Nevertheless, the CREATE MORE Act will strengthen our ability to attract investors looking to expand or relocate to the Philippines, given the relatively lower tariffs imposed on our exports to the United States (US). We are also actively pursuing more free trade agreements with our global partners,” he added.
Compared to its ASEAN neighbors, Philippine exports to the US will be subjected to a lower tariff of 17%. The US has imposed higher tariffs on Vietnam (46%), Thailand (36%), Indonesia (32%), Malaysia (24%), and Cambodia (49%).
Despite this, the government sees opportunities arising from global trade development.
The Philippines could be a hub for global value chains, particularly in industries like electronics, textiles, food, and automobiles.
With the country’s global comparative advantage in coconut oil, the country is also well-positioned to expand its market share in the US for coconut-based products, including desiccated coconut and copra meal/cake.
As major competitors like China, Bangladesh, Vietnam, Mexico, and India face higher tariffs, Philippine garment exports are also at an advantage of expanding its US market share.
To diversify export markets, the Philippine government continues to actively pursue new and expanded free trade agreements with economies like the United Arab Emirates (UAE), the European Union (EU), Chile, and Canada.
