The Philippines may incur an annual revenue loss of P3 billion to P6 billion due to a zero-tariff agreement on certain US exports, Finance Secretary Ralph Recto said Tuesday.
The projected losses are an estimate, as the final list of products benefiting from the zero-tariff deal is still being negotiated, he said.
Recto indicated that products like cars, wheat, pharmaceuticals and soybeans are among those discussed for tariff exemption.
“It depends if it’s all of them. Remember, there’s nothing final yet,” Recto said in an ambush interview, referring to the potential scope of the tariff exemptions.
“Assuming we grant what we discussed with them, like cars, wheat, pharmaceuticals, soybeans, it’s anywhere from P3 [billion] to P6 billion, but none of that is final yet,” he said.
The new zero-tariff arrangement for certain American products coincides with a recent reduction in the US tariff rate for the Philippines to 19 percent from 20 percent.
This decrease followed a meeting between Philippine President Ferdinand Marcos Jr. and US President Donald Trump.
Recto said that not all US imports would be subject to zero tariffs. “Not all imports will have their tariffs lowered. We only selected those that do not compete with local industries and are beneficial to consumers,” he said.
The Presidential Communications Office noted that the Philippines already has the second-lowest tariff rate globally.
Despite the potential revenue loss, Recto believes the overall impact of the zero-tariff deal would be beneficial for the Philippines.
“I think it’s favorable to us,” Recto said, adding that Trump mentioned a global minimum tariff of 15 percent, while the Philippines’ rate is 19 percent.
“The average Philippine tariff rate, if I’m not mistaken, is 10 percent. We have one of the lowest tariffs in the world, so that’s beneficial. Of course, exports will initially be affected, but as a whole, it looks like we have a better deal than many countries,” he said.
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