PHL seen as a 'friendshoring' destination for United States

THE PHILIPPINES is poised to attract more foreign direct investments (FDI) as it is seen as an emerging "friendshoring" destination for the US and as secondary hub for China-based companies, HSBC Global Research said.

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"Though currently paused, we think low reciprocal tariffs from the US and amicable Philippine-US relations offer global investors a potential opportunity to diversify," it said in a report.

"We think the Philippines may be a budding friendshoring destination for the US as well as a destination for the China+1+1 strategy for investors elsewhere. Time to turn the tides," it added.

US President Donald J. Trump announced higher reciprocal tariffs on most of the country's trading partners last month, with the Philippines facing a 17% rate, the second-lowest tariff in Southeast Asia.

The reciprocal tariffs have been paused for 90 days until July as countries negotiate lower rates with the US.

If the Philippines secures a lower reciprocal tariff from the US, HSBC said exports to the US would likely rise over time.

"We think there is scope to accommodate more, though the US is already the second-largest trading partner and export market of electronics for the country."

In 2024, the US was the country's top export market, receiving $12.12 billion worth of Philippine goods.