Semiconductors are seen on a printed circuit board on this illustration image taken February 17, 2023. (REUTERS/Florence Lo/Illustration/File Photograph)
MANILA, Philippines — The Philippines faces a larger threat to the tariff coverage of america in comparison with some neighboring nations amid the staggering 100-percent tariff on semiconductor exports, in response to a former commerce undersecretary.
Rafaelita Aldaba, analysis fellow emeritus on the Philippine Institute for Improvement Research, mentioned the nation had initially a low threat to America’s reciprocal tariffs introduced by US President Donald Trump on a number of international commerce companions in April.
Nonetheless, following Trump’s latest pronouncement, the Philippines has change into extra susceptible to the brand new US tariffs based mostly on a Tariff Publicity Composite Index (TECI). This measures the vulnerability of the nation’s exports to this new tariff regime. Primarily based on the TECI, the Philippines jumped to 2.4 from 1.8 beforehand.
READ: Is PH the subsequent semiconductor superpower?
However within the case of Vietnam, Thailand and Indonesia, Aldaba mentioned their respective indices had been left unchanged.
“And that’s as a result of semiconductors comprise an enormous proportion of those two nations’ exports to the US. Therefore, that will expose them to lots of dangers given the significance of their semiconductor exports,” mentioned Aldaba.
“The tariff fee severity, the tariff burden, as a result of that’s one hundred pc which means simply double the worth of the semiconductor exports that you just ship to the US,” she added.
Digital merchandise had been the nation’s prime export product. These comprised P39.09 billion or 53.4 % of complete exports of $73.27 billion in 2024, information from the Philippine Statistics Authority (PSA) confirmed.
In the meantime, the PSA famous that the US was the main vacation spot of Philippine exports up to now yr. It accounted for 16.6 % or $12.14 billion of complete export receipts.
Manila seeks clarification
Frederick Go, Particular Assistant to the President for Funding and Financial Affairs, mentioned earlier the federal government was searching for clarification from the US Commerce Consultant (USTR) on whether or not domestically manufactured chips had been certainly topic to the tariff.
If imposed, the brand new import tax would cowl a variety of merchandise—together with smartphones, home equipment, computer systems and online game consoles. These had been initially a part of the US tariff exemption listing.
READ: Exemption of Philippine semiconductors from 100% US tariffs pushed
Aldaba mentioned there are alternatives for the Philippines to unlock extra alternatives within the international commerce market. For instance, pursuing industrial upgrading and strengthening the resilience of export merchandise.
She mentioned the Philippines ought to transition from an assembly-centric to extra upstream actions, resembling for semiconductors. The nation must also develop into different merchandise, because the nation stays closely concentrated in semiconductor and electronics exports.
“We’re doing this already, nevertheless it’s actually on the extra primary, the extra easy processes, and what we wish is to have the ability to transfer as much as the extra advanced levels within the worth chain of the semiconductor business,” mentioned Aldaba.
Additional, Aldaba really helpful offering subsidies and strategic assist for precedence sectors in addition to reskilling and upscaling of the employees.
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