US tariff to weigh on Philippine growth

The steep new tariff imposed by the United States on Philippine goods, alongside the broader impact of US President Donald Trump’s massive fiscal stimulus, is expected to weigh on the country’s economic growth, according to analysts.

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In a report, Nomura Global Markets Research said the recently announced 19 percent US tariff on Philippine exports could reduce the country’s gross domestic product (GDP) growth by 0.4 percentage point from its baseline forecast, citing direct trade losses from higher duties.

"We think the tariff rates set by the US for Indonesia and the Philippines at 19 percent are fairly high and therefore pose downside risks to their respective growth outlooks," Nomura said. “We estimate the direct effects could reduce our baseline GDP growth forecast by 0.4 percentage points in the Philippines.”

The Japanese investment bank noted that the 19 percent rate, which was set after Trump’s meeting with President Marcos in Washington, was higher than expected, even topping the “Liberation Day” benchmark of 17 percent and Nomura’s earlier estimate of 10 percent.