Palace: US tariffs to have limited economic impact

Malacañang stated that the 19% US-imposed reciprocal tariff on Philippine exports will have limited effects on the country's economy, as confirmed by economists from ADB and CreditSights, and RCBC.

ADB Senior Country Economist for the Philippines Jacqueline Connell explained that the Philippines' economy is largely fueled by domestic demand, thus limiting the direct impact on GDP growth.

US President Donald Trump initially announced a 20 percent tariff, but after negotiations with President Ferdinand Marcos Jr., it was reduced to 19 percent.

In exchange for the slight tariff reduction, the Philippines agreed to open several markets to US goods, including medicine and automobiles.

The Philippines' economic dependence on US exports is low, with only 15.2% of its total exports going to the US, and 67% of these are from zero-tariff industries like semiconductors.

While the direct economic impact is considered minimal, Connell and RCBC's Michael Ricafort noted that global growth slowdown and increased trade uncertainty could weigh on the country's growth prospects through supply chain disruptions, investment patterns, and financial markets.

These developments highlight the need to strengthen the investment climate, accelerate infrastructure investment, and implement measures to boost productivity and competitiveness.