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Philippine President Ferdinand R. Marcos, Jr. is set to meet with top executives of US semiconductor companies this week as he seeks to further strengthen economic ties with the US, Manila’s envoy to Washington said on Sunday.

Mr. Marcos will hold talks with Semiconductor Industry Association President John Neuffer this week, Philippine Ambassador to the US Jose Manuel G. Romualdez said during a press briefing in Washington, DC. A video of the briefing was posted by Radio Television Malacañang (RTVM) on YouTube.

“We’ll be talking to the semiconductor industry, which is very important for us. [It’s] one of our biggest industries [with which we have] economic ties with the United States,” he added.

US President Donald J. Trump has imposed a 20% tariff on Philippine-made goods entering the country starting Aug. 1, higher than the 17% previously announced.

For now, semiconductors are excluded from the new reciprocal tariffs. Semiconductors and electronics are the Philippines’ top exports to the US.

Mr. Marcos is hoping to secure support from US semiconductor firms to shield the Philippine electronics sector from potential disruption. He is also set to meet with Mr. Trump to discuss the tariff issue.

Mr. Marcos met with Mr. Neuffer last December 2024, where he stressed the need to advance the Philippines’ position in the semiconductor value chain to keep pace with global technological shifts.

Manila is one of seven countries that the US is partnering with to diversify its semiconductor supply chain under the CHIPS and Science Act.

Mr. Marcos is also scheduled to meet on Monday afternoon (US time) executives of top US companies that are planning to boost investments in the Philippines.

Mr. Romualdez said the president’s meetings will include investors that are interested in the infrastructure sector.

“We also have some of those in infrastructure, which is part of the Luzon Corridor. So those… are part of his (Mr. Marcos’) business meetings that he will conduct in between important official meetings on Monday,” he said.

The Luzon Economic Corridor project is being undertaken via a trilateral commitment among the Philippines, US and Japan. The project seeks to enhance the connectivity of Luzon’s key economic areas — Subic Bay, Clark, Metro Manila and Batangas. It is widely seen to counter China’s Belt and Road Initiative.

Josue Raphael J. Cortez, diplomacy lecturer at the De La Salle-College of St. Benilde’s School of Diplomacy and Governance, said Manila can boost its semiconductor sector by ensuring fair competition and leveraging its partnership with the US under the CHIPS Act to enhance production capabilities and adopt best practices.

However, he added that to protect its broader economic interests, the country should maintain balanced trade ties with China, especially in mineral resources, agriculture, and raw materials, rather than relying solely on US investments.

“In the case of China, given that there could be a conflict of interest regarding chip production, we must strategize on how we can bolster our trade with Beijing, particularly on mineral resources, agricultural products, and raw materials, which are among our top exports to the country,” he said via Messenger chat.

China remains the Philippines’ largest trading partner, with the US coming in third. However, the territorial dispute with Beijing complicates the prospect of deeper cooperation.

Mr. Marcos’ trip to Washington could also position Manila as the potential lead during trade negotiations between the Association of Southeast Asian Nations (ASEAN) and the US, especially as Manila assumes chairmanship in the regional bloc in 2026, said Mr. Cortez.

This visit could enable Manila to drive a regional economic balancing strategy that leverages Southeast Asia’s strengths to benefit both ASEAN and the US while countering the economic impact of the US tariffs and China’s regional dominance, he added.

Meanwhile, Mr. Romualdez said Manila is not planning to pursue a free trade agreement at this time with Washington, as lowering the “reciprocal” tariffs is the current priority, in addition to defense and security matters.

“That’s still very far in the sense that we have to get over this particular discussion first on the tariff,” he said. “After that, we’re hoping that the free trade agreement will probably come into play.”

Mr. Romualdez also cited other agreements with the US, including security pacts on the Mutual Defense Treaty signed in 1951, the Visiting Forces Agreement signed in 1999, and the Enhanced Defense Cooperation Agreement signed in 2014.

“[There] will be more discussions on how we can continue to cooperate with the United States, our major ally. At the same time, also, I think President Marcos would like to see how we can work with the United States and other countries that have the same mindset as far as the West Philippines is concerned,” he added.

“We can’t negotiate on the basis of what we can get from another country. We have to focus on what is good for both countries.” — Chloe Mari A. Hufana

The Securities and Exchange Commission (SEC) expects more Filipinos to grow their retirement funds under the Personal Equity and Retirement Account (PERA) with the recent implementation of Republic Act No. 12214 or the Capital Markets Efficiency Promotion Act (CMEPA).

“The CMEPA strengthens the role of PERA by offering stronger incentives for long-term savings,” SEC Chairperson Francisco Ed. Lim said in an e-mailed statement on Monday.

“It encourages companies to support their employees’ retirement planning while simultaneously increasing the capital available in the financial system, stimulating the local stock market,” he added.

One of the CMEPA’s provisions is a 50% additional tax deduction for private employers who contribute an amount equal to or greater than their employees’ PERA contributions.

PERA, created under Republic Act No. 9505, is a voluntary retirement saving program. This is aimed at complementing the existing retirement benefits from the Social Security System, Government Service Insurance System and employer-sponsored plans.

“The program offers contributors tax benefits not available in other retirement investment products, encouraging Filipinos to save for their future,” the SEC said.

In January, DoubleDragon Corp.’s stock brokerage arm DragonFi Securities, Inc. became the first SEC-accredited PERA administrator after the corporate regulator issued guidelines on the accreditation of PERA market participants in September last year.

The SEC guidelines expanded the categories of entities eligible to register as PERA administrators to include securities brokers, investment houses, and investment company advisers or fund managers.

Under the SEC guidelines, a PERA administrator should have maintain a net worth of at least P100 million at all times, and have the adequate systems and technological capabilities, as well as the necessary technical expertise and personnel to administer all types of PERA investment products.

“Take-up of PERA is still relatively low in recent years. Hopefully, the CMEPA would further provide greater motivation to increase PERA in view of the additional incentives,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Data from the Bangko Sentral ng Pilipinas showed that PERA contributions increased by 24% to PHP 491.4 million as of end-2024 from PHP 396.3 million as of end-2023.

CMEPA took effect on July 1 after being signed by President Ferdinand R. Marcos, Jr. on May 29.

Among the law’s provisions is the reduction of the stock transaction tax to 0.1% from 0.6% as well as the decrease in the documentary stamp tax on the original issuance of shares of stock to 0.75% from 1% of par value.

The law also standardized the final withholding tax on interest income at 20% and harmonized the capital gains tax to a flat 15% on shares of foreign corporations.

“At its core, CMEPA is designed to align the Philippine capital markets more closely with regional peers by removing long-standing barriers to investor participation,” Mr. Lim said.

“This supports the commission’s mission to continue introducing reforms that will increase the local market’s competitiveness. The strict implementation of provisions under CMEPA is key toward ensuring broader public participation in the capital market and fostering a deeper investment culture among Filipinos,” he added. — Revin Mikhael D. Ochave

The Philippines is open to lowering duties on selected imports from the US to zero as part of tariff negotiations with Washington, Finance Secretary Ralph G. Recto said.

When asked whether the government might offer zero tariffs on US goods — similar to Vietnam’s approach, Mr. Recto replied: “Definitely.”

“Not for all products, but we have identified a set of products,” he told reporters last week, without giving details.

This as Philippine President Ferdinand R. Marcos, Jr. on Sunday departed for an official visit to the US, where he is scheduled to meet with US President Donald J. Trump.

Mr. Marcos is expected to bring up the proposed 20% US tariff on Philippine exports during his meeting with Mr. Trump on July 22.

In his departure speech at Villamor Airbase in Pasay City, Mr. Marcos said the Philippines is ready to negotiate a trade deal with the US to drive “strong, mutually beneficial, and future-oriented collaborations” that will support the country’s economic growth.

“My top priority for this visit is to push for greater economic engagement, particularly through trade and investment between the Philippines and the United States,” he said, according to a transcript from his office.

“I intend to convey to President Trump and his Cabinet officials that the Philippines is ready to negotiate a bilateral trade deal that will ensure strong, mutually beneficial, and future-oriented collaborations that only the United States and the Philippines will be able to take advantage of,” he added.

Mr. Marcos’ visit to the US is the first by a head of state from the Association of Southeast Asian Nations (ASEAN) since Mr. Trump assumed the presidency in January.

Mr. Marcos emphasized that while defense and security discussions will be tackled during the meeting with Mr. Trump, business and economic opportunities will dominate the agenda.

“I expect to meet with business leaders to explore business opportunities that will help to grow our economy even more,” he said.

Members of his economic team are already in Washington ahead of his arrival to prepare for investment talks and trade negotiations.

Mr. Recto said the economic team has a “great plan” for the negotiations with the US. He expressed optimism that the talks could lead to a lower tariff rate.

“I think our relationship with the US is not only trade, but also security. I’m sure they’ll be giving that some importance as well,” he said.

Mr. Trump had earlier slapped a 17% tariff on Philippine goods, the second lowest rate among ASEAN members. This was raised to 20%, despite earlier efforts by Philippine negotiators to lower the tariff rate. If no deal is forged, the 20% tariff will take effect on Aug. 1.

The Philippines is now under pressure to secure a tariff rate lower than Indonesia and Vietnam, which have both completed negotiations with the US.

The US lowered the tariff rate on goods from Indonesia to 19% from 32% previously.

“If it’s 19% for them, it should be 10% for us. The minimum is 10%, right? 11% is fine,” Mr. Recto said hours after the news of Indonesia-US deal was released.

Vietnam currently faces a 20% tariff on its exports to the US, along with a 40% levy on goods transshipped through the country. This is significantly lower than the previously announced US tariff of 46%.

Thailand earlier said it is offering to scrap tariffs on 90% of US goods in a bid to negotiate a tariff lower than the 36% previously announced.

Cambodia is also facing the same 36% rate and still without a finalized deal.

Free trade deal

Meanwhile, Mr. Recto said a free trade agreement (FTA) with the US is also part of the negotiations.

“We prefer that. We want to have one FTA. Not only with the US, but with Europe, and with many other countries. More trade should be better,” Mr. Recto said. 

“We have to expand their markets. Get more investments in manufacturing in the Philippines so that we can export more. Then let’s take a look at the final tariffs later on.”

The Philippines is also pushing to maintain the zero tariffs on semiconductor exports, a key component of its top export commodity, the electronics sector.

“We want to reduce whatever duties they impose on our products. If possible, we want it to be zero [on semiconductors],” Mr. Recto said.

Analysts said the Philippines’ offer to apply zero tariffs on goods from the US is unlikely to sway the Trump administration.

“It may not be enough on its own to bring down the 20% US tariff,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies said in a Viber message.

He said the offer will be seen as a “strong goodwill gesture” and show the country is willing to engage constructively.

“The Philippines must complement this offer with a clear value proposition such as enhancing supply-chain partnerships, especially in critical sectors like semiconductors and agri-processing,” he said.

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said a key element to achieve a lower export levy is “reciprocity.”

“We need to take advantage of US agriculture. Particularly, wheat and soyabeans. Which are used primarily on feeds. If we are able to import cheaper this will help food security,” he said in a Viber message.

Josue Raphael J. Cortez, who lectures on diplomacy at De La Salle-College of St. Benilde’s School of Diplomacy and Governance, said the Philippines can maintain a healthy balance between fulfilling its security commitments to the US and pursuing economic independence by continuing to promote an independent foreign policy.

However, he warned that such a path carries risks amid today’s geopolitical volatility, citing the US reciprocal tariffs and rising tensions in the South China Sea.

“The political-security and economic dimensions may be interrelated, but our approach presently is showing that we highly value our security partnership with the US, but we cannot overly depend on one partner alone,” he said in a Messenger chat.

Mr. Cortez said the Philippines can strengthen economic security by expanding partnerships in sectors where it has strategic advantages, such as semiconductors, and by sustainably using mineral resources like nickel, which is essential for electric vehicle batteries.

IBON Foundation Executive Director Jose Enrique A. Africa said the government has weak negotiating leverage as manufacturing is now at the smallest share of the economy in 75 years.

“The delegation offering to open up the economy even more to get lower US tariffs will be self-defeating and dangerous,” he said in a Viber message.

“The Philippines will be at fault for eroding what little leverage it has if it succumbs to playing by the rules being imposed by the US. It’s never too late to adopt a posture of domestic industrialization policy, such as exactly what the US is doing, and building strategic alliances within the region to shift the balance,” he added. — Aubrey Rose A. Inosante and  Chloe Mari A. Hufana, Reporters

The United States’ remittance tax could trim the Philippines’ remittance growth by 0.5 percentage point (ppt), the Bangko Sentral ng Pilipinas (BSP) said.

“The impact under the worst-case scenario could be about 0.5 (ppt) or even lower,” BSP Deputy Governor Zeno R. Abenoja told BusinessWorld on the sidelines of an event on Friday.

“But again, behavior could change. For example, it’s possible that the sender will absorb the rate, the additional tax on it, such that in the end, what is received is still the same as what is sent,” he added.

The central bank expects cash remittances from overseas Filipino workers to grow by 2.8% this year and by 3% in 2026.

The 0.5 ppt estimated impact is still “very preliminary,” Mr. Abenoja said, as they are still studying the effects of the remittance tax.

“We still have some time to assess since it’s going to be January next year that it will be implemented. We are trying to confirm and clarify how it will be implemented, so we look at some worst-case scenarios,” he said.

US President Donald J. Trump’s recently passed “One Big Beautiful Bill” imposes a 1% excise tax on cash remittance transfers from the United States to other countries, starting Jan. 1, 2026. This was lower than earlier proposals of a 3.5% levy.

The tax was also initially aimed at non-US citizens but now applies to any remittance sender.

“As you know, the remittances from the US compose the bulk of our overseas Filipino remittances. If you look at the behavior of remittances, they’re used to finance education, health expenditures, and housing. These are necessary expenditures,” Mr. Abenoja said.

In the first five months of the year, cash remittances grew by 3% to USD 13.77 billion from USD 13.37 billion a year prior.

Around two-fifths of the Philippines’ remittance flows come from the United States. Latest BSP data showed that the US was the top source of remittances in the five-month period, accounting for 40.2% of the total.

“We’re looking at these characteristics of flows before we can finalize the impact. Because the behavior may also change such that in the end, the impact could be minimal,” Mr. Abenoja said.

“So, we’re looking at both how it will be implemented and how the senders will adjust to these new rules.”

The Department of Finance  earlier said the tax could impact 12.8% of the Philippines’ annual remittances. This would impact around USD 1.9 billion of the expected USD 36.5-billion remittances from the US in 2026.

In a separate e-mail to BusinessWorld, the BSP said that remittances often remain resilient despite shocks.

“During periods of crisis and uncertainties, overseas Filipino (OF) remittances have generally continued to increase, reflecting the strong altruistic motives of OF migrants and workers to support their dependents regardless of prevailing economic conditions,” it said.

The number of documented temporary Filipino migrants in the US are at an estimated 500,000, the BSP said, though noted that these figures vary.

“These are non-US citizens from the Philippines who hold either green cards (immigrant) or long-term nonresident visas. As a share of total documented migrants reported by the Department of Foreign Affairs, documented temporary migrants comprise 12%,” it added. — Luisa Maria Jacinta C. Jocson, Senior Reporter

The Philippines’ external debt service burden rose to nearly USD 5 billion at end-April due to higher amortization payments, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

Preliminary data from the central bank showed debt servicing on external borrowings went up by 1.3% to USD 4.91 billion in the January-April period from USD 4.85 billion a year ago.

Broken down, amortization payments increased by 6.2% to USD 2.42 billion in the first four months from USD 2.28 billion in the same period in 2024.

On the other hand, interest payments declined by 3% year on year to USD 2.49 billion from USD 2.57 billion.

The debt service burden represents principal and interest payments after rescheduling, according to the BSP.

This includes principal and interest payments on fixed medium- and long-term credits, including International Monetary Fund credits, loans covered by the Paris Club and commercial banks’ rescheduling, and New Money Facilities.

It also covers interest payments on fixed and revolving short-term liabilities of banks and nonbanks.

However, the debt service burden data exclude prepayments on future years’ maturities of foreign loans and principal payments on fixed and revolving short-term liabilities of banks and nonbanks.

“The slight year-on-year increase in external debt service may partly reflect the wider budget deficits that needed more NG (National Government) borrowings,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The NG’s budget deficit widened by 29.41% to P523.9 billion in the January-May period from the P404.8-billion gap last year.

Mr. Ricafort also cited “still relatively higher Fed interest rates since 2022 that contributed to higher debt servicing costs.”

The Fed is expected to keep its benchmark rate steady in the 4.25%-4.5% range at its July 29-30 meeting, a level policymakers regard as at least moderately restrictive, Reuters reported.

The Fed last cut rates in December, when policymakers started assessing the possible impact on prices from the import tariffs that Mr. Trump quickly began imposing after returning to the White House in January.

“For the coming months, the share of foreign borrowings in the total borrowing mix has been reduced in view of forex (foreign exchange) risks entailed, with a greater share of domestic borrowings. Nevertheless, future borrowings would be a function of the trend on budget deficits,” Mr. Ricafort said.

From this year until 2027, the National Government plans to source at least 80% of its borrowing program from domestic sources, and 20% from foreign lenders. The government previously adopted a 75:25 borrowing mix.

Earlier BSP data showed outstanding external debt jumped by 14% to USD 146.74 billion at the end of March. This brought the external debt as a percentage of gross domestic product (GDP) to 31.5% from 29.8% in the fourth quarter.

The BSP’s external debt data cover borrowings of Philippine residents from nonresident creditors, regardless of sector, maturity, creditor type, debt instruments or currency denomination.

Meanwhile, the debt burden as a share of GDP stood at 2.8% in the first quarter, lower than the 3.1% in the year-ago period. — Luisa Maria Jacinta C. Jocson with Reuters

The Philippines has room to negotiate with the US to bring down its reciprocal tariff to as low as 10% using defense concessions as a key bargaining chip, according to Fitch Solutions’ research unit BMI.

“While [former US President Donald J.] Trump has raised the rate from 17% to 20% for no explicit reason, the Philippines still faces some of the lowest tariffs in Asia,” Darren Tay, head of Asia country risk at BMI, told a webinar on Thursday.

“Overall, we still think the Philippines stands a good chance of bargaining the reciprocal rate down to the baseline 10%,” he added.

The Philippine government earlier said it is working to secure better terms with the US after Mr. Trump announced a 20% tariff on Philippine goods last week, effective Aug. 1.

“While few details have emerged from bilateral trade talks, we believe defense spending will emerge as a point of contention in the proceedings,” Mr. Tay said.

“Making concessions on defense is one good way of securing a trade deal, given that pushing allies to do more is one of Trump’s priorities,” he added.

He said increasing defense spending to 5% of economic output, similar to North Atlantic Treaty Organization benchmarks, would “impress” Mr. Trump, but noted that the Philippines is likely to propose a lower percentage.

Data from the Stockholm International Peace Research Institute  showed the Philippines’ military expenditure rose nearly 20% to USD 6.12 billion in 2024 from a year earlier. This brought the country’s military burden — military spending as a percentage of gross domestic product (GDP) — to 1.3%.

“But that should still be sufficient to secure a deal. Our base case, therefore, envisions reciprocal tariffs at 10%,” Mr. Tay said.

He noted that even in a worst-case scenario where tariffs rise to 20% across all sectors — including a 200% duty on pharmaceuticals — the overall impact would be limited due to the Philippines’ minimal export volume of such products to the US.

BMI maintained its economic growth outlook for the Philippines, noting that the country is less vulnerable to tariff shocks than its regional peers.

“In terms of GDP at risk, the Philippines is relatively insulated,” Mr. Tay said. “Besides the fact that export exposure to the US is slightly below average, we know that roughly half of exports to the US actually come in the form of services that are largely provided by the business process outsourcing sector — and those are untouched by tariffs.”

BMI projects Philippine GDP to grow 5.4% this year, slightly below the government’s 5.5% to 6.5% target.

Increased costs

Meanwhile, Moody’s Analytics said the US tariff could drive up costs and force businesses to rethink their supply chain strategies.

“The introduction of a 20% blanket tariff on Philippine exports to the United States adds complexity to global supply chains,” Moody’s Senior Director Choon Hong Chua said in a commentary released this week.

He added that the tariff could increase operational uncertainty for Philippine exporters accessing the US market.

“Philippine exporters may face increased costs and heightened uncertainty in accessing the US market, which could lead to reduced demand and intensified competitive pressures — particularly if higher costs are passed on to consumers,” Mr. Chua said.

Mr. Trump announced the tariff, which takes effect on Aug. 1, last week. The 20% rate is higher than the 17% initially announced in April and brings the Philippines in line with tariffs imposed on Vietnam, which recently secured a trade deal with the US, and now also faces a 40% duty on transshipped goods.

Other Southeast Asian nations also hit with increased tariffs include Laos and Myanmar (40%), Cambodia and Thailand (36%), Indonesia (32%), and Malaysia and Brunei (25%).

Moody’s noted that the Philippines could be affected since the US is the top destination for Philippine-made goods. More than 15% of the country’s exports in May were bound for the US, according to the Philippine Statistics Authority.

Mr. Chua advised companies with exposure to Philippine-based sourcing to reconsider their supplier strategies amid rising geopolitical and tariff-related risks.

“For companies with exposure to Philippine sourcing, it may be prudent to reassess supplier strategies in light of evolving geopolitical and tariff-related risks,” he said.

While firms may look to shift their sourcing to other Southeast Asian markets, Mr. Chua warned that such a move could involve short-term operational challenges.

“While some organizations may consider alternative sourcing options within Southeast Asia, any transition could involve short-term operational adjustments,” he said.

Despite these potential disruptions, Mr. Chua cited the importance of keeping a flexible and well-monitored supply chain to weather trade uncertainties.

“Maintaining supply chain visibility and agility remains essential for resilience,” he said. “Businesses that proactively adapt to shifting trade conditions and mitigate emerging risks will be better positioned to navigate ongoing uncertainty.”

Moody’s commentary underscores growing global concerns about how escalating trade measures could reverberate through supply chains, particularly in export-dependent economies like the Philippines. — Luisa Maria Jacinta C. Jocson, Senior Reporter