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US levy 'mild surprise,' growth outlook stable
Manila Bulletin
|July 12 2025
Japanese financial giant MUFG Bank Ltd. sees a mild impact arising from the potentially higher United States (US) tariff set to be imposed on Philippine goods imported into America.
"This announcement is to some extent a downside surprise for our FX [foreign exchange] and macro forecasts, given that we were implicitly expecting a trade deal between the US and the Philippines with a small bilateral trade deficit between the two countries," MUFG Global Markets Research senior currency analyst Michael Wan said in a July 10 report.
Wan was referring to US President Donald Trump's July 9 letter to President Ferdinand Marcos Jr., announcing a 20-percent tariff on Philippine exports to America effective Aug. 1, which is higher than the 17-percent reciprocal tariff announced in April.
Despite this, Wan said MUFG still expects the peso to strengthen to the P55 level against the US dollar early next year, while the Bangko Sentral ng Pilipinas (BSP) is seen to be on track to cut key interest rates by 50 basis points (bps) more before year-end, even as "the risks tilted slightly to more cuts with this tariff announcement."
This story is from the July 12 2025 edition of Manila Bulletin.
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