Neda briefing: PH may feel US tariff war – via China imports

BAGUIO CITY, Philippines — Philippine manufacturers catering to the local market are not immune to the effects of the tariff war set off by US President Donald Trump, an official of the National Economic and Development Authority (Neda) has warned.

Trump has imposed import taxes of a staggering 145 percent on China, the highest among dozens of countries targeted for having trade surpluses with the United States. Imports from the Philippines are slapped with a 17-percent tariff.

At an economic briefing on Tuesday, Jose Dado, acting Neda deputy director for the Cordillera region, said the punitive tariffs imposed by the United States on China can prompt Chinese manufacturers to shift more toward markets like the Philippines and other members of the Association of Southeast Asian Nations (Asean).

This can potentially flood the Philippine market with cheaper goods and “adversely impact our domestic producers for household and personal items, electronic gadgets, appliances, motor vehicles, light and heavy equipment, and construction materials,” he said.

READ: Beijing slams ‘appeasement’ of US in trade deals that hurt China

Historically, the growers of high-value salad vegetables in Benguet’s mountainside farms face the fiercest competition from Chinese imports.

Priority

Dado said sustaining the Cordillera supply chain would be the priority this year for the mountain region due to the likely impact of the tariff war triggered by Trump, and given the region’s continued, albeit slow growth last year.

“Shifts in trade policies in the United States is triggering trade tensions and supply chain disruptions [and the 17-percent tariff] imposed by the US on Philippine goods can potentially slow down our exports if we fail to restrategize and diversify,” he said after analyzing the region’s 4.8-percent gross regional domestic product growth (GRDP)for 2024.

The region’s economic expansion last year was slower than the 6.9 percent growth in 2023 and missed the target of 5.5 percent.

“In 2024, our economy withstood the challenges of extreme weather events, geopolitical tensions, and global demand uncertainties — conditions that may now be the new normal. Thus, rather than solely striving for higher growth rates, our priority is on fostering resilience,” Dado said.

The Neda official admitted that the first Philippine semiconductor plant of American chipmaker Texas Instruments (TI), as well as airline parts manufacturer Moog Philippines, both located in the Baguio City Economic Zone (BCEZ), are vulnerable to supply and trade disruptions resulting from Trump’s tariffs.

However, the impact on Baguio may be limited, as TI’s larger plant is in Clark in Pampanga, said Villafe Alibuyog, Cordillera director of the Philippine Statistics Authority, who presented the region’s GRDP.

Manufacturing at risk

Manufacturing, along with the subindustries of electricity, steam, water and waste management, grew at a significantly slower rate of 0.3 percent in 2024, compared to 4.2 percent in 2023, Dado said.

“The slowdown in manufacturing is a global phenomenon, with subdued global demand due to geopolitical tensions and the slow recovery of advanced economies. In particular, the BCEZ recorded no new investments in 2024 and saw a 25.4-percent reduction in sales — particularly in electronics and semiconductors, IT companies, and wearing apparel,” he said.

Mining operations, which also rely on imports, are bracing for a worst-case scenario if the Trump-imposed tariffs intensify, said Vivian Romero, an economist at the Mines and Geosciences Bureau (MGB) in the Cordillera.

Cordillera mining shrank by 2.1 percent, reflecting “a continuous decline in production volume,” Dado noted, despite high global gold prices.

In 2024, highland mines—some of the country’s oldest—produced P13.8 billion worth of minerals, including gold (2,160 kilos), silver (2,872 kilos), and copper (47,823 metric tons), with total export earnings of P14.6 billion, according to MGB data.

The services sector remains the dominant contributor to the Cordillera economy, accounting for a 69.4-percent share.

Agriculture improves

For the first time in decades, the region’s agriculture sector grew by 1.1 percent last year, rebounding from a series of declines, the last at 1.2 percent in 2023, Alibuyog said.

“Noteworthy is the increased production of highland vegetables and fruits, which offset declines in palay (unhusked rice) and corn output. Strawberry production also rose significantly due to expanded farming areas in Madaymen and along the Mountain Trail,” Dado said.

Building on strategies developed during the COVID-19 pandemic, the Department of Agriculture (DA) is enhancing local supply chain systems by ensuring that each town and city maintains a sustainable food supply, said Susan Balanza, the DA planning officer for the Cordillera.

In Baguio, urban farmers produced up to 13.7 million MT of vegetables across 3,007 city farms in 51 barangays, according to the City Veterinarian and Agriculture Office.

At the Bureau of Plant Industry in Baguio, farm scientist and researcher Juliet Ochasan has been developing alternative strawberry breeding techniques and has collected 30 plant varieties previously discarded by farmers to revive and expand the region’s strawberry industry.

(2025/04/24-05:40)