THE PHILIPPINES should take advantage of the 90-day pause before the higher US tariffs set in to attract manufacturers relocating from heavily tariffed China, an industrialist said.
Concepcion Industrial Corp. Chairman and President Raul Joseph A. Concepcion called the 90-day pause a strategic opportunity as “many countries and companies (look), because of the tariff differentials, to move away and to deleverage against China,” he said on the Money Talks with Cathy Yang program on One News.
“As a result of that, then you will see, I think, an opportunity for the Philippines to invite manufacturers to come in, and this is the time. I think we have that small timeframe to ask people to come into the Philippines,” he added.
The Philippines was assigned a 17% tariff, the second lowest in the Association of Southeast Asian Nations (ASEAN) after Singapore’s baseline rate of 10%.
ASEAN member countries are facing some of the highest duties. Cambodia was assigned a 49% tariff, followed by Laos (48%), Vietnam (46%), Myanmar (44%), Thailand (36%), Indonesia (32%), Malaysia (24%), and Brunei (24%).
US President Donald J. Trump has since announced a 90-day pause on the tariffs, leaving only the blanket 10% duty on most trading partners until July.
Asked how the tariffs have been affecting businesses, Mr. Concepcion said companies in the last two weeks have received calls inquiring whether they can manufacture products for export to the US.
“That opportunity is available to us today, and the ability to do that now is very important for us. We just have to work smarter. Right now the government, together with the private sector, has to look for those opportunities and then obviously focus and pursue those,” he said.
“We’ve got to look at making the Philippines a destination. We have to broadcast that and market that and really put up the support services that help companies that are willing to transfer here,” he added.
However, he said that a free trade agreement may not be beneficial for the Philippines in the long term.
“It is good if it helps. But at the end of the day, I do not think that that is something that is sustainable in the long term. Companies do not come in and invest just because of trade deals,” he said.
He added that more than a trade deal, the Philippines should ready its infrastructure, logistics, downstream industries, and workforce.
Ateneo de Manila Professor Luis F. Dumlao said that the Philippines should articulate to the US that the two economies are complementary.
“We do have a deficit in electronics, but what we export to them are parts that the US can complete as manufactured end-user products, which they can export around the world, including the Philippines,” he said.
“We should sit down basically as partners, not as trade competitors,” he added.
Meanwhile, Mr. Dumlao said that he does not think that a free trade deal is possible between the Philippines and the US.
“The US, for political reasons, will never get rid of its subsidy on agricultural products. So we have to rely on second best,” he said.
“That is why we have to sit down together and get to something that is as close to free trade as possible. Knowing that we should not be naive that absolute free trade is possible,” he added.
Further, he said that there is a need for the Philippines to market its second-lowest tariff in ASEAN.
“We should try to take advantage of the fact that others will be diversifying instead of putting all their eggs on China in terms of manufacturing. We are not going to get them all, but it is just an opportunity to get a piece of the action,” he added. — Justine Irish D. Tabile