Manila: The Philippines’ economic output in 2025 is not expected to be significantly affected by the imposition of a higher reciprocal tariff of 19 percent for exports to the US, effective August 1. This adjusted rate follows President Ferdinand R. Marcos Jr.’s visit to the US from July 20 to 22. The tariff was reduced from the initially announced 20 percent, though it remains slightly higher than the 17 percent rate set in April.

According to Philippines News Agency, Finance Undersecretary Domini Velasquez commented on the situation during the 2025 mid-year economic briefing organized by the British Chamber of Commerce of the Philippines (BCCP) in Makati City. She noted that Philippine exports to the US represent a smaller portion of the country’s total exports compared to other regions.

“For the full year GDP (gross domestic product), the impact is very limited. For exports, of course, there will be some impact. However, at this time, trade officials see it as limited, but we need to consider the entire picture,” Velasquez stated.

The economic managers have set a growth target of 5.5 to 6.5 percent for the year. In the first quarter, GDP growth accelerated to 5.4 percent from 5.3 percent in the previous quarter. The target for goods exports this year is a decline of 2 percent, despite an annual growth of 26.1 percent in June, up from a 15.5 percent expansion in May.

Velasquez remarked that the steady rise in exports might be due to US businesses engaging in front-loading to avoid higher costs once the new tariff comes into effect.

Trade Undersecretary Allan Gepty, who also attended the event, mentioned ongoing negotiations with US counterparts regarding the specifics of the new tariff rate. He confirmed that the 19 percent rate is expected to be implemented starting Friday.

When asked about the potential effects of front-loading by businesses, Gepty acknowledged having internal analyses but chose not to disclose details. “But we want to see what the results would be,” he added.