3 days ago
Salceda optimistic about PH entering into FTA with US
Economist Joey Salceda on Saturday expressed optimism that the Philippines will enter into a free trade agreement with the United States following President Ferdinand Marcos Jr.'s White House meeting with US President Donald Trump earlier this week.
Salceda made the statement after Marcos negotiated a zero tariff plan for some American goods entering the country in exchange for a lower tariff rate for Philippine exports to the US.
'When Marcos said we are offering you zero tariffs, that is an invitation we can do an FTA,' Salceda said at a news forum in Quezon City.
The economist added that now that Trump is more open to bilateral trade talks instead of forming multilateral partnerships, 'it is no longer that impossible that we can work out a free trade agreement.'
The former lawmaker recalled that the Philippines was not able to join the Obama administration-backed Trans-Pacific Partnership (TPP) since there was a requirement to allow foreign ownership of land, which the Philippine Constitution prohibits.
'So when Marcos said, 'We are offering them zero [tariffs],' he was trying to [persuade] the US administration into a Free Trade Agreement,' Salceda said.
Early morning on Wednesday (Philippine time), Trump announced a new 19% tariff rate for Philippine goods entering America. This is lower than the 20% announced in a letter earlier this month but higher than the 17% rate announced last April on what the US president referred to as Liberation Day.
The US chief executive initially said the Philippines is going "open market" with the United States with zero tariffs, while the Philippines would pay a 19% tariff.
Marcos, however, has since clarified that the zero tariffs on US products would only apply to certain markets, such as automobiles.
The President also committed to increasing imports of soy, wheat, and pharmaceuticals from the US.
Special Assistant to the President for Investment and Economic Affairs of the Philippines Frederick Go bared that American agri-fisheries commodities, considered 'sensitive' for the local sector, entering the country are not included in the zero tariff scheme offered to the US.
Salceda, meanwhile, explained that only 31% of Philippine exports are subject to Trump's 19% tariff, while the rest—such as electronics, wood, metals, fuels, and chemicals—are covered by multiple trade agreements for exemptions.
For Salceda, the effective rate was actually 6.3%, in favor of the Philippines.
The lawmaker said the Philippines will benefit mostly from an FTA with the US, as it would result in cheaper products and an increase in investments from American firms.
'Definitely, from tariff savings alone there will be higher consumer welfare aside from the creation of jobs from new investments in manufacturing,' he said.
Data from the US Trade Representative showed America's goods trade with the Philippines totaled $23.5 billion in 2024.
Broken down, the US goods exports to Manila stood at $9.3 billion, while its imports amounted to $14.2 billion, resulting in a trade-in-goods deficit with the Philippines of $4.9 billion in 2024, up 21.8% year-on-year.
Meanwhile, data from the Philippine Statistics Authority (PSA) showed the US was the country's top export destination in 2024, accounting for 16.6% or $12.14 billion of the total export receipts of $73.27 billion. — VBL, GMA Integrated News
