Tereso O. Panga, director general of the Philippine Economic Zone Authority (PEZA), urged that the government pursue the planned bilateral free trade agreement with the US to cushion potential impacts on the country’s exports to the US, as the new Trump administration is raising universal import tariffs to bring back American businesses and manufacturing operations back to their shores.
“The government can counter the planned import tariff hikes by forging a bilateral free trade agreement with the US and the revival of the Generalized System of Preferences Program to allow for greater market access for our country’s commodity exports to the US,” said Panga in his “Ecozones In-Depth” post.
Panga stressed that it is a must that the government address the potential impacts of the high import tariff policy by the Trump administration, particularly the electronics manufacturing services and semiconductor manufacturing services (EMS-SMS) industry, the country’s biggest export to the US.
Of total PEZA ecozone investments, the EMS-SMS industry accounts for 32%, 12% share IT-BPM, and 317 American registered business enterprises.
Panga reported that American trade experts on Trump’s Second Term Trade Policy Vision at the recent Annual World Electronics Forum Breakfast Session, CES 2025 in Las Vegas are worried about Trump’s tariff threats such as the 10- 50% universal baseline tariff.
Trump earlier pledged to impose 60% tariffs on goods from China and 10 percent from the rest of the rest of the world.
Panga noted that PEZA economic zones are home to 482 EMS-SMS companies that provide critical back-end support such as OSAT, ATP, IDM & IC design) to their principal clients in the US.
Most of these are longstanding American registered business enterprises that have made the Philippines their manufacturing hub in the region.
It could be recalled that Trump already agreed to the proposed bilateral FTA with the Philippines during his first term in office, but this was derailed as the Biden administration pursued the Indo-Pacific Economic Partnership instead.
