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Trade Secretary Cristina A. Roque on Friday said that the Philippines is considering to import more agricultural products from the US as it seeks to negotiate a lower tariff rate next week.

Ms. Roque and Special Assistant to the President for Investment and Economic Affairs Frederick D. Go will be in Washington from April 29 to May 2 for tariff talks with their US counterparts.

“The goal of the meeting is to get what is best for the country, which is, of course, to bring down the tariffs and to really just reiterate that we will continue our strong relationship with the US,” Ms. Roque told reporters on the sidelines of the Franchise Asia Philippines 2025 International Conference and Expo on Friday.

To achieve this, she said that the Philippines is looking at increasing the volume of imports from the US, particularly farm products.

“So, what we are importing from them, we will try to import more. Let’s say soybeans and frozen meat, so agricultural products … but we need to balance everything also with our agricultural sector,” she added.

Asked if a free trade agreement (FTA) is still on the table, she said that “we will still have to see if we can really get an FTA … but we will put all of the possibilities on the table.”

Ms. Roque said that the Philippine economic team is set to hold a meeting before the trip to consolidate inputs from different industries to know what the country will be willing to put on the negotiating table.

“We want to get a consensus also, so when we decide, it’s not based on what we think, but based on the consultations with the different industries,” she said.

“Because we want that whatever we negotiate, it will be for the best of the industry of the Philippines.”

Asked at what level they hope the 17% tariff rate will be brought down, Ms. Roque said that will be among the things that will be finalized in the economic team’s meeting prior the trip.

“But definitely they (the stakeholders) want lower tariffs than those of the neighboring countries’ because once our tariff is lower, then that gives us an edge in terms of business with the US,” she said.

Earlier this month, US President Donald J. Trump introduced 10% blanket tariffs on all its trading partners but paused a plan to impose higher reciprocal tariffs on some countries for 90 days.

Philippine exports to the US face a 17% tariff, the second lowest among Association of Southeast Asian Nations member countries after Singapore’s baseline rate of 10%. — Justine Irish D. Tabile

Budget Secretary Amenah F. Pangandaman anticipates a rebound in infrastructure spending in the next two months, following an expected dip in April due to the election ban.

In an e-mail interview with BusinessWorld, Ms. Pangandaman said disbursements “tend to pick up strongly” in May and June. 

“With regard to the election ban, based on historical government spending performance for similar national and local election periods, for example, in 2019 or in 2022 (presidential election), we see a bit of a temporary slowdown when the election ban is in effect in April,” she said on April 15.

The Commission on Elections’ ban on public works spending began on March 28 and will run for 45 days. The midterm elections are scheduled for May 12.

Latest data from the Department of Budget and Management (DBM) showed spending on infrastructure and other capital outlays declined by 19.8% to PHP 146.7 billion in December 2024 from P183 billion in the same month in 2023.

For the full year, expenditures on infrastructure and other capital outlays jumped by 10.1% to PHP 1.33 trillion from PHP 1.2 trillion in 2023.

Infrastructure spending data for the first three months of 2025 is yet to be released.

Ms. Pangandaman, who chairs the Development Budget Coordination Committee, said there would be “a slowdown in project execution during the first half of 2025 on account of the upcoming midterm national and local elections.”

A similar slowdown in infrastructure spending was seen in the months leading up to the May 2022 national polls.

In 2022, infrastructure and other capital expenditures fell by 9.7% in April, but inched up 2.1% in May and jumped by 51.9% in June.

Despite the expected slowdown, Ms. Pangandaman remains optimistic that infrastructure disbursements will be “robust” in 2025.

“We are optimistic that infrastructure spending will remain robust and a significant growth driver for the year, particularly from the ongoing projects which were started and accelerated ahead of the election ban,” she said.

Ms. Pangandaman noted that in the first two months of 2025, state spending already showed a 13.76% increase to P822 billion.

“When we look at other data, for instance, using bank reports for the same period to check specific agency spending performance, the disbursements of at least the Department of Public Works and Highways and the Department of Transportation — the two main infrastructure departments — combined for PHP 83.9 billion, more than 50% of their equivalent disbursements for the comparable period in 2024 of P54.5 billion,” she said.

Ms. Pangandaman said this only factored the notices of cash allocation (NCA) disbursements and left out the non-NCA items.

The NCA is a cash authority issued by the DBM to central, regional and provincial offices and operating units through government banks to cover the cash requirements of the agencies.

“These numbers somehow indicate the relative strength of infrastructure spending that we expect for the year,” Ms. Pangandaman said.

Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc. said there may be an increase in infrastructure spending in 2025. 

“Apart from the election season, lower borrowing costs and fiscal spending to boost economic growth may also drive higher infra spending. I expect to see the increase in infra spending in the second half of the year,” Mr. Erece told BusinessWorld on Thursday. 

In addition, Mr. Erece expects public-private partnerships projects to “prosper” amid lower borrowing cost and fiscal spending.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said infrastructure spending has become a major contributor to economic growth and development.

He noted that infrastructure spending’s share in gross domestic product has gone up to 5-6% in recent years, sharply higher than the less than 2% share in the last 20-30 years. – Aubrey Rose A. Inosante, Reporter

The Philippine government said that it is confident that it will be able to secure a “mutually advantageous” arrangement with the US ahead of trade talks with US counterparts next month.

“We are confident that, through our strong economic and diplomatic ties, we can find arrangements that are mutually advantageous,” said Special Assistant to the President for Investment and Economic Affairs of the Philippines Frederick D. Go in a statement on Wednesday.

Mr. Go issued the statement following the consultations his office conducted with the Department of Trade and Industry (DTI) and key export leaders.

Mr. Go will lead a delegation to Washington to discuss the tariffs on Philippine goods with the US Trade Representative.

Presidential Communications Undersecretary and Palace Press Officer Claire A. Castro on Monday said that the meeting will take place in the first week of May.

Earlier this month, US President Donald J. Trump introduced 10% blanket tariffs on all its trading partners but paused a plan to impose higher reciprocal tariffs on some countries for 90 days.

Philippine exports to the US face a 17% tariff, the second lowest among Association of Southeast Asian Nations member countries after Singapore’s baseline rate of 10%.

According to the DTI, the consultations with export leaders were meant to “gather insights and formulate strategic measures to strengthen bilateral trade with the US amidst the recently imposed US reciprocal tariffs.”

The DTI said the exporters gave their insights on the current market dynamics in the US.

“They elucidated the strategic opportunities and challenges that the current situation presents… The discussions focused on how the government and the private sector can work together in highlighting the Philippines as a reliable and trusted trading partner amidst uncertainties in international trade,” it added.

The DTI expressed confidence that the Philippine government can work with the US in identifying opportunities that will benefit their respective economies.

“The consultative process has enhanced mutual understanding and alignment on shared goals,” Trade Secretary Ma. Cristina A. Roque said.

According to the Trade chief, the consultations “aim to ensure that views and interests of various sectors are taken into consideration as the government works to secure the best possible outcomes for the Philippines in our trade relations with the US.”

In a previous statement, Ms. Roque said that the Philippines aims to engage the US to facilitate enhanced market access for Washington’s key export interests, such as automobiles, dairy products, frozen meat, and soybeans.

Problems at the ports

Meanwhile, United Portusers Confederation of the Philippines, Inc. President Nelson M. Mendoza said that the US tariffs are a pressing concern for the shipping industry.

“Right now, even the exporters are not in a better position because a lot of their orders, although they were not canceled, were on hold,” Mr. Mendoza told reporters on Wednesday.

“Those orders are being held because of the tariff. Now, because of the 90-day pause, those will probably be initially moved. But after 90 days, we do not know what will happen,” he added.

Mr. Mendoza said the export orders for 2025 were placed in 2024 when rates and costs were lower.

At the same time, he said that the imports will also be affected, as goods coming from the US will be more expensive.

“As the shipping lines said, the route of their vessels will be irregular for probably a moment. For me, I can say for four years at least, as Trump will be there for four years,” he said.

“We are just hoping that the negotiations between the US and other countries will pave the way to at least neutralize it (the situation) a bit,” he added.

However, Mr. Mendoza said that the new tariff measure could also present opportunities, such as Chinese companies increasing their production in the Philippines.

“They might export from the Philippines with a lesser tariff compared to China. They may not necessarily relocate here, but they might increase their production,” he said.

“But the important thing is that we improve our ease of doing business so a lot of them will transfer to us. Because right now we are not competitive in terms of putting up business compared to other Asian countries,” he added.  – Justine Irish D. Tabile, Reporter

The Philippines is among the least exposed to US tariff policies in Southeast Asia and stands to benefit from shifting trade directions, the Philippine Institute for Development Studies (PIDS) said in a discussion paper.

“For smaller economies like the Philippines, the new tariff regime presents both a strategic opportunity and a formidable challenge,” according to the paper authored by PIDS Emeritus Research Fellow Rafaelita M. Aldaba.

“The relatively lower tariff rate creates openings for niche export expansion, particularly in sectors with tight price margins and high tariff sensitivity such as garments and footwear.”

US President Donald J. Trump slapped the Philippines with a 17% tariff, the lowest among Association of Southeast Asian Nations-5 (ASEAN-5) countries. Vietnam faced the highest tariff rate at 46%, followed by Thailand (36%), Indonesia (32%) and Malaysia (24%).

However, Ms. Aldaba, a former undersecretary at the Department of Trade and Industry, said that capitalizing on the window of opportunity is “far from automatic.”

“The Philippines’ ability to convert this relative advantage into tangible economic gains will hinge on how swiftly it can mobilize responses in logistics, investment facilitation, and targeted export promotion.”

PIDS used a tariff exposure composite index (TECI) to measure the “relative vulnerability of the country’s exports to the new tariff regime.”

Under the TECI index, the Philippines and Indonesia logged the same score of 2.2, which indicates a moderate risk.

Vietnam registered the highest exposure (3.4), followed by Thailand (3.0). Malaysia scored a 2.8, which indicates a moderate exposure.

Data from PIDS also showed that based on the relative exposure of ASEAN-5 economies to the US market, the Philippines has the smallest export footprint. Its share of exports is just 5% of the region’s total.

However, it also noted that the Philippines’ exports to the United States accounts for about 20% of its total exports.

The country’s top exports are electronics, particularly related to semiconductors, as well as coconut oil and printing machines.

“Its limited product diversification and small volume make it more vulnerable to sector-specific shocks but also signals potential for targeted upgrading,” Ms. Aldaba said.

Ms. Aldaba said the Philippines benefits from the lowest reciprocal tariff among ASEAN-5 due to the structure of its exports.

“Electronics — including semiconductors — account for over 50% of the country’s total exports, and many of these products are included in the US exemption list. This strongly cushions the Philippines from broader tariff disruptions, helping to temper its actual trade vulnerability,” she added.

However, she said the country is still not completely unaffected by these tariffs and faces some form of exposure.

“Non-exempted exports — such as coconut oil, insulated wires, containers, and select low-tech manufacturing goods — are more vulnerable to cost increases and competition, especially from trade diversion out of China or higher-tariff ASEAN partners.”

“Despite this, the Philippines is strategically positioned to benefit. Its unique combination of low tariff rate, strong exemption for high-value exports, and moderate strategic exposure creates an advantageous platform for trade redirection, particularly for thin-margin, cost-sensitive goods.”

To maximize these benefits, PIDS said the country must “bolster its industrial base, improve logistics and Customs efficiency, and actively promote itself as a stable and efficient export hub amid shifting global supply chains.”

The Philippines is also “well-positioned to capture relocation and supply-chain shifts,” particularly in electronics goods.

“However, to realize this opportunity, the Philippines — and similar ASEAN peers — must address structural gaps,” Ms. Aldaba said.

These include ramping up infrastructure development to address gaps and alignment of the labor market to upskill workers to meet the needs of complex manufacturing.

“To overcome these barriers and unlock its full export potential, the Philippines must urgently implement a coordinated set of strategic trade and industrial interventions to safeguard critical sectors while acceler-ating industrial upgrading,” she added.

Ms. Aldaba also called for the need for industrial upgrading and resilience building, and trade defense and monitoring mechanisms.

“Without swift and proactive policy implementation, the Philippines risks being merely a passive beneficiary rather than a strategic player in ongoing global trade realignments,” she said.

“Conversely, by adopting targeted policy and institutional measures — grounded in digital readiness, sectoral upgrading, and strategic positioning — the Philippines can establish itself as a credible alternative hub for digital-ly-enhanced, service-integrated, and geopolitically trusted exports.” — Luisa Maria Jacinta C. Jocson

The International Monetary Fund (IMF) slashed its gross domestic product (GDP) growth projections for the Philippines from this year to the next, reflecting heightened global uncertainty arising from US tariff policy.

In its latest World Economic Outlook (WEO), the IMF downgraded its GDP growth forecast for the Philippines to 5.5% this year from the 6.1% projection in its January update.

It also lowered its 2026 forecast to 5.8% from 6.3% previously.

These would fall below the government’s 6-8% growth targets for this year to 2026.

The IMF said its forecasts consider the weaker-than-anticipated Philippine growth in the fourth quarter, as well as external headwinds stemming from heightened trade tensions and policy uncertainty.

“Downward revisions to growth for 2025 and 2026 are observed throughout the region and globally, reflecting the recent external developments,” an IMF spokesperson said in an e-mail.

These include the “direct impact of higher tariffs on the Philippines’ goods exports to the US, downward revisions to trading partners’ growth, and impact of higher uncertainty and financial tightening,” it said.

US President Donald J. Trump on April 2 announced a barrage of reciprocal tariffs on nearly all of its trading partners, with a baseline rate of 10%.

While most of the higher reciprocal tariffs have been suspended until July, the baseline 10% tariff is still in effect.

The Philippines was slapped with a 17% tariff rate on its exports to the US, the second lowest in Southeast Asia.

The IMF said its WEO forecasts are based on information available as of April 4 and are subject to “significant uncertainty.”

However, the IMF said the Philippine economy is seen to remain somewhat resilient.

“Despite a more difficult environment, growth in the Philippines is expected to remain relatively robust in 2025,” it said.

The IMF’s forecast for the Philippines places it as the second-fastest growing economy in emerging and developing Asia this year, just behind India (6.2%).

The region is projected to grow by 4.5% this year and 4.6% in 2026, as Southeast Asian countries are among the most affected by the US tariffs.

In Southeast Asia, the Philippines has the fastest-projected GDP growth forecast this year. It is ahead of Vietnam (5.2%), Indonesia (4.7%), Malaysia (4.1%) and Thailand (1.8%).

“On the upside, recent legislative reforms could facilitate an accelerated implementation of domestic infrastructure projects, including through public-private partnerships, and lead to higher foreign direct investment (FDI) and investment,” the IMF said.

“In terms of growth drivers, domestic consumption remains the key driver for growth and is expected to be supported by lower inflation and low unemployment,” it added.

Meanwhile, the multilateral institution said it expects headline inflation in the Philippines to average 2.6% this year and 2.9% in 2026, well within the central bank’s 2-4% target band.

“Relative to January WEO, the headline inflation projection for 2025 has been revised down by 0.2 percentage point (ppt) to 2.6%.”

This reflects the “lower-than-expected inflation outturn in the first quarter, and downward revisions to global fuel and food price projections.”

The latest data from the local statistics agency showed inflation slowed to 1.8% in March, its slowest rate in nearly five years. This brought average inflation to 2.2% in the first quarter.

Accounting for risks, the central bank sees inflation averaging 2.3% in 2025 and 3.3% in 2026.

The IMF said risks to the inflation outlook are “broadly balanced.”

“On the upside, potential disruptions in global supply chains and trade restrictions can raise imported inflationary pressures, while risk-off shocks could contribute to currency depreciation.”

“The Philippines’ exposure to extreme climate events also poses additional inflationary risks. On the downside, risk of weaker global demand prospects could pose deflationary risks, including through lower commodity prices.”

Meanwhile, the IMF said the Bangko Sentral ng Pilipinas (BSP) has room to further lower interest rates and “firmly move to a neutral stance.”

“With inflation projected to remain around the BSP’s target of 3%, inflation expectations well-anchored, and amid an expected widening of the output gap, there is space for a more accommodative stance.”

The Monetary Board earlier this month resumed its rate-cutting cycle with a 25-basis-point (bp) rate cut, bringing the benchmark to 5.5%.

BSP Governor Eli M. Remolona, Jr. has said they will likely continue cutting rates further this year in “baby steps” or increments of 25 bps.

There are four more Monetary Board policy meetings this year, with the next slated for June 19.

“Amidst prevailing uncertainty and with both upside and downside risks to inflation, a data-dependent approach, and clear and effective communication around policy settings will be important to manage expectations and provide clarity on the BSP’s reaction function,” the IMF added.

‘Negative shock to growth’

Meanwhile, the IMF expects global growth to slow to 2.8% this year and to recover to 3% in 2026, reflecting “the direct effects of new trade measures and their indirect effects through trade linkage spillovers, heightened uncertainty, and deteriorating sentiment.”

The new forecasts are lower than the 3.3% projection for both years in the January WEO update.

Trade uncertainties have “surged to unprecedented levels,” the IMF said in the latest report.

“The swift escalation of trade tensions and extremely high levels of policy uncertainty are expected to have a significant impact on global economic activity,” it added.

The US is expected to grow by 1.8% this year, 0.9 percentage point lower than the previous projection “on account of greater policy uncertainty, trade tensions and softer demand momentum.”

“Tariffs are also expected to weigh on (US) growth in 2026, which is projected at 1.7% amid moderate private consumption,” the IMF said.

The IMF also lowered projections for Canada, Japan and the United Kingdom.

For China, it downgraded its growth outlook to 4% this year from 4.6% previously due to the impact of the US tariffs. It also lowered its 2026 China forecast to 4% from 4.5% previously.

The tariffs and consequent countermeasures alone are a “major negative shock to growth,” it added.

“The unpredictability with which these measures have been unfolding also has a negative impact on economic activity and the outlook and, at the same time, makes it more difficult than usual to make assumptions that would constitute a basis for an internally consistent and timely set of projections.”

Global inflation is also seen to ease at a slower pace than initially expected, the IMF said.

It also flagged “intensifying downside risks” on global output.

“Ratcheting up a trade war, along with even more elevated trade policy uncertainty, could further reduce near- and long-term growth, while eroded policy buffers weaken resilience to future shocks.”

“Divergent and rapidly shifting policy stances or deteriorating sentiment could trigger additional repricing of assets beyond what took place after the announcement of sweeping US tariffs on April 2 and sharp adjustments in foreign exchange rates and capital flows, especially for economies already facing debt distress.”

Moving forward, the IMF said there is a need for “clarity and coordination.”

“Countries should work constructively to promote a stable and predictable trade environment, facilitate debt restructuring, and address shared challenges.”

“At the same time, they should address domestic policy and structural imbalances, thereby ensuring their internal economic stability. This will help rebalance growth-inflation trade-offs, rebuild buffers, and reinvigorate medium-term growth prospects, as well as reduce global imbalances,” it added. – Luisa Maria Jacinta C. Jocson, Senior Reporter

The PHilippines has room to negotiate with the US to lower its reciprocal tariffs, Fitch Solutions’ unit BMI said, but added that trade tensions are still likely to weigh on economic growth.

“For now, though, Washington has lowered the tariff rate to 10% for 90 days. We think that the Philippines will be successful in keeping them at this level at the very least,” BMI Asia Country Risk Analyst Shi Cheng Low said in a webinar on Tuesday.

US President Donald J. Trump slapped a 17% tariff on the Philippines earlier this month, but suspended this for 90 days, keeping the blanket 10% duty in effect.

The Philippines’ 17% tariff rate is much lower than its Southeast Asian peers, some of which are facing some of the highest reciprocal tariffs. Six Southeast Asian countries were slapped with much larger-than-expected tariffs of between 32% and 49%.

BMI said the Philippines can negotiate with the US on further lowering trade barriers.

To address the US’ demand to increase import volumes, BMI said the Philippines can possibly increase energy and weapon imports, as well as lower levies on US goods.

“(The Philippines) remains an important security partner for the US, especially as Washington is working to counter Beijing’s expanding reach in the South China Sea,” Mr. Low said.

“Therefore, we think that this will give them at least a bit of leverage. If we are right, the final impact will be less severe, and we expect them to shave off about 0.6 percentage point (ppt) of headline growth.”

If the 17% reciprocal tariff is implemented, BMI’s baseline estimates show that this could subtract about 1.1 ppt from the Philippines’ real GDP growth.

“We revised our real GDP growth projections from 6.3% to 5.4%,” Mr. Low said.

BMI’s forecast would fall short of the government’s 6-8% target this year.

“Now, this is more aggressive than the 0.6 ppt we have previously mentioned but because it’s a reflection of a very tepid domestic activity we’ve seen recently. So, more stimulus will be needed to cushion the impact.”

“The Philippines’ exposure to both China and the US economy is pretty balanced. With both economies likely to slow over the next few quarters, the Philippines will definitely follow suit,” he added.

Meanwhile, BMI expects the Bangko Sentral ng Pilipinas to cut rates by an additional 75 basis points (bps).

The Monetary Board earlier this month resumed its easing cycle, cutting rates by 25 bps to bring the benchmark to 5.5%.

The next rate-setting meeting is on June 19. There are four more Monetary Board meetings slated this year, including June. — Luisa Maria Jacinta C. Jocson