PH export edge erodes

With President Ferdinand Marcos Jr. only managing to secure a one-percentage-point (ppt) reduction in tariffs on Philippine exports to the United States (US), the country is seen to lose its “minimal” competitive edge over its regional peers—an advantage it enjoyed due to a strong peso and higher inflation.

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“A reciprocal tariff rate of 19 percent would erase this advantage and risks putting Philippine exports at a disadvantage in the US market,” HSBC Association of Southeast Asian Nations (ASEAN) economist Aris Dacanay in a July 23 commentary.

Dacanay expects the Philippine economy to be challenged “without the relative advantage of a lower tariff rate.” As such, he sees Philippine gross domestic product (GDP) growth to fall short of the downscaled growth target of 5.5 to 6.5 percent.

“We maintain our growth forecasts of 5.4 percent and 5.8 percent for 2025 and 2026, respectively, while flagging the increasing downside risk of a deeper easing cycle by the Philippine central bank,” Dacanay said.