PH gov’t looking to capitalize on Trump’s reciprocal tariffs

The Philippines will remain resilient against trade wars but the country is looking to woo foreign investors into expanding or relocating their businesses amid the possible supply chain disruptions to be brought about by the reciprocal tariffs announced by US President Donald Trump.

According to Finance Secretary Ralph Recto, the government is leveraging the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act to lure more investors into the Philippines.

“The Philippine economy is primarily driven by domestic demand rather than exports. This makes us relatively resilient against trade wars,” he said in a statement released Thursday.

Starting April 9, Trump has ordered a reciprocal tariff of 17% on Philippine exports on the 34% rate that Manila charges against American exports, based on a post on Trump’s Truth Social page. An annex attached to Trump’s statement posted on the White House’s website, however, shows that the reciprocal tariff for the Philippines would be at 18%.

“However, as with all countries, we are not spared from the impact of the expected decline in international trade and possible slowdown of global growth due to supply disruptions, higher interest rates, and higher inflation,” Recto said.

“Nevertheless, the CREATE MORE Act will strengthen our ability to attract investors looking to expand or relocate to the Philippines, given the relatively lower tariffs imposed on our exports to the United States. We are also actively pursuing more free trade agreements with out global partners,” he added.

The US is set to impose higher tariffs on neighbors in the ASEAN — Vietnam at 46%, Thailand at 36%, Indonesia at 32%, Malaysia at 24%, and Cambodia at 49%.

CREATE MORE was enacted by President Ferdinand “Bongbong” Marcos Jr. in November 2024, with the implementing rules and regulations (IRR) signed in February.

The IRR seeks to clarify and refine provisions of CREATE MORE, including transitory rules for pre-CREATE registered business enterprises to continue enjoying previously granted tax incentives.

It also addresses investor concerns regarding the issuance of the value-added tax (VAT) zero-rating certificate by providing detailed guidelines on eligibility and compliance criteria and clarifying the certificate’s covered period.

The DOF said that with the measure, it sees opportunities arising from global trade development, such as the Philippines possibly becoming a hub for global value chains particularly in industries like electronics, textiles, food, and automobiles.

The agency said the country is also well-positioned to take a bigger bite of the US market for coconut-based products, including coconut and copra meal/cake, and for Philippine garments.

Moving forward, the government said it is actively pursuing new and expanded free trade agreements with the United Arab Emirates (UAE), the European Union, Chile, and Canada.—LDF, GMA Integrated News