Economist Joey Salceda says President Marcos’ U.S. visit helped avoid a 20% tariff across all exports, preserving exemptions for 73% of Philippine goods and resulting in a 6.3% effective tariff rate—one of the lowest in Southeast Asia.
QUEZON CITY — Economist and former Chair of the House Ways and Means Committee during the 19th Congress Joey Salceda praised President Ferdinand “Bongbong” Marcos Jr.’s recent visit to the United States, saying the diplomatic effort helped shield Philippine exports from steep tariff increases and preserved access to the U.S. market for the country’s major industries.
Speaking at the Saturday News Forum in Quezon City on July 26, Salceda said the outcome of the visit should not be framed narrowly as a one-percent reduction in tariffs.
“This was never just a 20-to-19 tariff story,” Salceda said. “That framing is misleading. What the President did was avert a full 20 percent across-the-board tariff through early engagement and high-level negotiation.”
Tariff Outcome: More Than Just Numbers
Following a bilateral meeting between Marcos and U.S. President Donald Trump, the U.S. government announced that it would impose a 19% tariff on Philippine imports—down from a previously threatened 20%. While some analysts saw the change as marginal, Salceda emphasized that the broader structure of Philippine-U.S. trade made the outcome more favorable than it appeared.
According to Salceda, only around 31% of Philippine exports are subject to the 19% tariff, while the remaining 73% are exempt, based on current trade arrangements and product classifications. These exemptions mean that the effective average tariff rate on Philippine goods entering the U.S. is just 6.3%.
“The overall impact is far more limited than a blanket rate,” he said, noting that the Philippines now holds one of the lowest effective tariff rates in Southeast Asia, following recent exemptions.
The exemptions apply to a wide range of goods that are covered under preferential trade programs such as the Generalized System of Preferences (GSP), although the GSP itself remains under periodic review.
Averting Damage to Key Sectors
The Philippines’ export sector—especially in electronics, garments, processed food, and business process outsourcing (BPO)—relies heavily on continued access to U.S. markets. A 20% blanket tariff would have raised prices and potentially reduced demand for Philippine goods.
Salceda credited the Marcos administration’s early engagement with U.S. officials as a factor in reducing the severity of the trade action. While the final terms were announced by President Trump, the negotiation process, he said, involved technical trade teams working to define tariff boundaries and protect critical industries.
“We managed to keep 73% of our exports exempt. That’s what matters,” Salceda said.
Looking Ahead: Trade Framework Still Evolving
While no free trade agreement (FTA) was signed during the visit, Salceda expressed hope that the Philippines’ diplomatic gains could lead to a deeper bilateral partnership with the U.S., potentially modeled on the Japan-Philippines Economic Partnership Agreement (JPEPA).
JPEPA, signed in 2006, was the Philippines’ first bilateral trade deal. It eliminated tariffs on most goods traded between the two countries and opened opportunities for Filipino professionals in Japan.
Salceda likened the current U.S.-Philippines dialogue to a “JPEPA-style arrangement”—not in legal form, but in its mix of trade access, sectoral cooperation, and investment interest. However, no formal trade framework with the U.S. has been confirmed beyond the tariff decision.
Trade Stability for Now
The 6.3% effective tariff rate, based on the composition of Philippine exports and the exemptions granted, positions the country favorably in the region, according to economists cited in GMA News reports. It helps protect local jobs, reduce inflationary risks, and maintain investor confidence.
Salceda urged the Department of Trade and Industry to continue engaging its U.S. counterparts and to pursue permanent arrangements that secure long-term market access and investment partnerships.
