The Philippines is putting the proposed bilateral free trade agreement (FTA) with the United States on the back burner until a solid deal on the Trump-era tariffs has been finalized.
Philippine Ambassador Jose Manuel Romualdez to the U.S. said during a media briefing organized by the U.S.-Philippine Society (US-PH Society) that while the Trump administration is open to a bilateral FTA, the Philippine side believes this is not the right time to pursue it.
“They said that they’re open, meaning the United States is open for a free trade agreement with us. But I don’t think we’re prepared to go into discussions on that one until we have more or less solidified our agreement with this on the tariffs. But it’s open,” said Ambassador Romualdez.
For now, he added, “At this point in time, we’re not really pushing it. In other words, there are other more important agreements.”
While the Philippines has expressed gratitude for the tariff concessions granted to help make bilateral trade more balanced since the Trump administration imposed a 19 percent tariff on Philippine exports to the U.S., several sectoral tariffs still need to be finalized.
The reduction to 19 percent applies more specifically to certain industries, such as semiconductors, which remain under discussion.
Romualdez said the Semiconductor Industry Association in the United States is also taking the lead in ensuring that the tariff measures will not be overly disruptive, noting that the U.S. has very large export companies operating in the Philippines.
Another sector under consideration is business process outsourcing (BPO), which has already been cleared from taxation. There had been discussions about including BPOs in the tariff measures, given that many companies operating in the Philippines are American-owned.
“We’re still continuing to talk about other issues here and there. But at the end of the day, I think we’re quite happy,” he said.
It can be recalled that both sides jointly pushed for a bilateral FTA during the first Trump administration.
At one point, the Philippines was on the verge of entering serious discussions with the U.S. and had undertaken preparations, including modifying its approach to trade and regulatory requirements, to pave the way for negotiations.
Key issues included land ownership and labor laws, among others.
“We’ve had quite a number of successful legislation to ease up on some of these requirements for a free trade agreement,” the ambassador said.
Among the measures passed was the extension of land lease terms to up to 99 years.
However, Romualdez reiterated that the Philippines is not prioritizing the planned FTA with the U.S. at this point in time.
