Exporters more worried about global tensions than US tariffs

By Justine Irish D. Tabile, Reporter

THE EXPORT and logistics industries are taking a wait-and-see stance on US trade policy but consider President Donald J. Trump’s intent to dial down the threat of war on various fronts as more significant than his tariff threats.

Philippine Exporters Confederation, Inc. (Philexport) President Sergio Ortiz-Luis, Jr. said that the Export Development Council has yet to meet to recalibrate of the Philippine Export Development Plan (PEDP).

“I do not think there’s an intention to have a meeting just to recalibrate. We are waiting for more input and see how it will turn out,” Mr. Ortiz-Luis said in a chance interview.

“My hope is that… we can get back to normal in our relationship with our neighbors, especially China,” he added.

He said Mr. Trump’s statements expressing his intent to avoid war or halt ongoing ones will help ease tensions in Asia.

“As he was saying before the election, he will try to end the war in Ukraine, and he will try to prevent war with China; that will be a reverse of what we have been experiencing, and that would be a good sign,” he said.

He said that if conflict with China is averted, Philippine investment, trade, and tourism are set to benefit.

“One of the reasons why we are lagging in investment is because we are perceived to be the first to fall victim if there is a war in this part of the world. That’s why our neighbors are watching us,” he said.

“It would be good for trade because we lost trade with China in 2023. We hope to recover that. Our tourism also fell; it’s growing, but not as fast as our neighbors because tourism from China has not recovered,” he added.

He said exporters are more concerned about the geopolitical picture than tariffs due to a perception that Mr. Trump will not treat the Philippines too roughly.

“I don’t think it can be that substantial — that it will affect us worse than what geopolitics is doing to us. And besides, I don’t think Trump will target the Philippines. I think he is more friendly with the Philippines,” he said.

Rosemarie Rafael, Airspeed chairman and chief executive officer, said the logistics industry is waiting to see where the tariffs will be imposed.

“If he says that I’m going to impose this much on this country, then of course the competitiveness of that country will be affected,” Ms. Rafael said.

“That’s why we will have to find out which countries are going to be affected. Those countries probably will not be exporting to America, but it will shift to other countries,” she added.

“The thing that I think is being prioritized by our government is to work on bilateral agreements and other free trade agreements,” she said.

OUTLOOK
According to Mr. Ortiz-Luis, Philexport is expecting exports to hit the Philippine Development Plan (PDP) targets but miss out again on the targets set in the PEDP this year.

“We are already behind the PEDP targets. So what is more realistic is the targets set by the PDP,” he said.

Last year, Philexport said Philippine exports of goods and services have the potential to exceed the P107 billion set for 2024 by the PEDP.

The Philippine Statistics Authority issued a preliminary estimate for merchandise exports of $73.21 billion in 2024.

The Bangko Sentral ng Pilipinas issued its own preliminary estimate of $37.43 billion in the first nine months of 2024, up 6.5% from a year earlier.

The PDP projects merchandise exports of $61.58 billion, while services exports are expected to hit $45.42 billion.

For 2025, the PDP projects exports of $113.42 billion this year — $65.27 billion in merchandise exports and $48.15 billion in services exports.

The PEDP target in 2025 is for merchandise and goods exports of $163.6 billion, 44.23% higher than the target set in the PDP.

In logistics, Ms. Rafael does not expect results to exceed pre-pandemic levels.

“It’s not going to be the same as pre-pandemic. But I believe that there are opportunities that we can tap in different areas. So the key here is to be really identify what the areas are,” she said.

“For 2025, I believe that there’s going to be movement but maybe not really that much in the first to second quarter. But there will be movement; there will be growth,” she added.