Philippines seen to weather US tariff shocks

MANILA, Philippines — Traders woke up to a 17-percent tariff slapped by United States President Donald Trump on goods coming from the Philippines, part of the sweeping tariffs that caused a bloodbath across global markets on Thursday.

By the end of the session, the Philippine Stock Exchange Index (PSEi) fell by 1.63 percent, or 101.95 points, to close at 6,145.73.

This represents the PSEi’s worst performance since March 11, or the day former President Rodrigo Duterte was arrested.

Likewise, the broader All Shares Index lost 1.1 percent, or 40.71 points, to 3,664.41.

Analysts note, however, that this may have been a knee-jerk reaction to the reciprocal tariffs rolled out by Trump, adding that the Philippine economy was still driven by domestic consumption.

“Overall, we expect some downside, but the market will likely shrug it off since we’re actually a bit better off versus our peers, and we’re not reliant on exports as they are,” AP Securities Inc. research head Alfred Benjamin Garcia told the Inquirer.

“The downside will mostly come from the indirect impact on us from the global trade and economic slowdown due to the tariffs,” Garcia added.

Services firms, including International Container Terminal Services Inc. (ICTSI) and Jollibee Foods Corp., saw the steepest decline at 1.98 percent, followed by the conglomerates at 1.76 percent.

ICTSI and Jollibee both have sizable multinational operations.

READ: JP Morgan: Philippines positioned to thrive amid Trump tariffs

Economic impact

Jun Neri, lead economist at Bank of the Philippine Islands, also pointed out that the country’s trade activity with the United States represented only 1 percent of the Philippine gross domestic product (GDP) compared with Vietnam’s 26 percent.

According to Neri, the Philippines may see indirect benefits from the higher US tariffs on other countries.

“Exporters from countries like China, facing higher tariffs, may redirect their goods to alternative markets, including the Philippines, which could help contain inflation,” he said.

At the same time, Neri recognized that the new duties could trigger a contraction in global trade and subsequently gnaw on the local economy and currency.

READ: Explainer: Key details on Trump’s market-shaking tariffs

Based on BPI’s analysis, the country’s GDP growth could shave off 0.5 percent as a result of lower demand for exports and weaker industrial output, which could slow by as much as 1.7 percentage points.

The Philippine peso could likewise reach 60.40 against the US dollar this year, Neri said.

“The peso may see more volatility due to heightened risk aversion and concerns over export performance,” he explained. “A weaker peso could push up import costs, adding to inflationary pressures.”

As a result, this may temper the Bangko Sentral ng Pilipinas’ rate cuts for the year to maintain stability, Neri added.

(2025/04/04-02:30)