US tariffs to spur interest rate cuts

Central banks in Southeast Asia, where economies like the Philippines export a wide array of goods to the United States (US), are expected to cut interest rates some more as tariffs take effect next month, according to the think tank Capital Economics.

- By BEN ARNOLD DE VERA

In a July 23 report, Capital Economics senior global economist Ariane Curtis said Southeast Asian countries and Mexico belonged to economies where “downside risks to activity dominate and where monetary policy is likely to be set looser than would have been the case in the pre-tariff world.”

“These economies are relatively dependent on US demand for their exports, meaning that tariffs will reduce GDP [gross domestic product] growth,” Curtis said.

President Ferdinand Marcos Jr. and US President Donald Trump this week agreed to impose a 19-percent tariff on Philippine exports to America, while certain American products would reportedly enjoy zero duty upon entry into the Philippines.