A government think tank said the Philippines got an “inferior” tariff agreement with the U.S. compared to its Southeast Asian neighbors – Vietnam and Indonesia.
The policy note published by state think tank Philippine Institute for Development Studies (PIDS) argued that compared with the outcomes of the negotiations made by Indonesia and Vietnam with the US, the Philippines seems to have secured a less favorable deal than its two ASEAN peers.
Following the talks between US President Donald Trump and Philippine President Ferdinand Marcos Jr., it was agreed on July 22, 2025 that the Philippines would face a 19 percent tariff rate, a reduction from the 20 percent announced by Trump on July 9.
However, the negotiated 19 percent was actually higher than the 17 percent enforced by the US on Philippine goods in April this year.
Meanwhile, Indonesian negotiators also secured 19 percent like the Philippines, while Vietnam got 20 percent.
But the policy note said that in reality this could be considered a downgrade for the Philippines.
“Relatively speaking, Indonesia and Vietnam received better deals since their Liberation Day tariffs were 32 percent and 46 percent, respectively. The Liberation Day tariff for the Philippines was 17 percent, which is lower than the negotiated level,” it explained.
“The situation became more humiliating for the Philippines shortly after its deal with the US was announced, as Japan was slapped with only a 15 percent tariff,” added research authors Josef Yap and Francis Mark Quimba.
Comparatively, the Philippines achieved only a 0.32 percent improvement in tariff compared with 8.47 percent and 12.15 percent for Indonesia and Vietnam, respectively.
Meanwhile, scaled by export size, the net increase in the effective tariff per USD billion of exports for the Philippines is 0.068. For Indonesia and Viet Nam, the corresponding values are 0.031 and 0.013, respectively, the paper said.
“The Philippine deal remains inferior to those of the other two countries,” the report asserted.
It also pointed out that “history shows that the Philippines has consistently yielded to the demands of the US (e.g., parity rights), and Filipinos have little to show for it.”
“…the stark difference in the export performance of the Philippines vis-à-vis Indonesia and Viet Nam is sufficient proof of how a closer alliance with the US has adversely affected its economic trajectory,” the policy note continued.
Last July, the business community had already cautioned against giving up any more concessions to the US, urging instead the Philippine administration to remind the Americans of the enduring strong partnership between the two nations.
