MANILA, Philippines — Finance Secretary Ralph Recto said the Philippines stands to benefit from a zero-tariff deal with several US products, noting that it could reduce the cost of essential goods such as bread and medicine.
Recto told reporters yesterday that the agreement, still under continuing negotiation, could translate to an estimated P3 billion to P6 billion loss in revenue annually, which still depends on the final list of products covered.
“Not all imports will go down. We chose especially those that do not compete with local industries and are beneficial to consumers,” he said.
“For example, wheat. Don’t we want the price of wheat to be cheaper? There is no tariff on wheat. And won’t the price of pandesal go down? That’s in our favor,” he said.
Aside from wheat, other US goods that have zero tariff include vehicles, soy, pharmaceutical and soybeans, according to Recto.
Data from the Philippine Statistics Authority showed that the US is the Philippines’ largest export market in May, with goods valued at $1.1 billion, representing 15.3 percent of the country’s total exports.
While the deal focuses on imports from the US, Recto clarified that no discussions have been made about reducing tariffs on Philippine exports like semiconductors.
Recto added that despite concerns about the impact on local exporters, the Philippines still maintains one of the lowest tariff rates in the world.
“I think it’s in our favor. I think we will benefit,” he said. “we have one of the lowest tariffs in the world if you take a look. So that’s beneficial for us too. Of course, our exports will also suffer initially. But as a whole, we have a better deal than many other countries,”
He also responded to comparisons with Indonesia, which significantly cut tariffs to 19 percent from the initially imposed 32 percent.
Recto noted that unlike Indonesia, the Philippines did not commit to major purchases in return.
“They gave everything. They also promised to buy several billion dollars worth of planes. We didn’t make any such promises,” he said.
Be the first to comment