The prospect of a Philippines–United States free trade agreement is back on the table, but Manila appears in no rush to seize it as both sides navigate a shifting global tariff landscape shaped by Washington’s renewed protectionist push.\
Philippine Ambassador to the United States Jose Manuel Romualdez said the US government had conveyed its openness to discussing a bilateral FTA, reviving momentum that first gained traction during the initial term of US President Donald Trump.
“If you remember, [during] the first Trump administration, there was a push for that. But we were already on the verge of having some serious conversations on the free trade agreement with the United States, and it was important, obviously, for that to happen,” Romualdez said at the US-Philippines Society press briefing in Makati City on Tuesday.
The statement underscores a strategic recalibration in Washington, where trade policy is increasingly being wielded as both an economic and geopolitical instrument. Yet despite the apparent diplomatic opening, the Philippine government is prioritizing immediate trade and investment stability over embarking on complex FTA negotiations.
Romualdez acknowledged that while the Philippines has passed key economic liberalization measures in recent years to attract foreign capital, including reforms in retail, public services, and foreign investment laws, the government is currently focused on resolving tariff-related concerns.
“I don’t think we’re prepared to go into discussions on that one until we have more or less solidified our agreement on this, on the tariffs,” he told reporters.
Tariffs, semiconductors, and strategic industries
The ambassador’s remarks come amid heightened trade tensions following a January proclamation by President Trump imposing a 25 percent ad valorem duty on imports of semiconductors, semiconductor manufacturing equipment, and derivative products. The move, framed as a national security measure, has sent ripples through global supply chains—particularly in export-oriented economies like the Philippines.
“The reduction to the 19 percent [tariff] is really more specific on particular industries like the semiconductor, which is still being discussed right now,” Romualdez said.
He noted that discussions remain ongoing, with the Semiconductor Industry Association in the United States actively engaging policymakers in Washington to mitigate disruptions.
“We have a very large export community here and mostly these are American companies that are operating here,” he added, pointing to the deep integration of US firms within the Philippines’ electronics and semiconductor ecosystem.
The White House has also signaled that broader semiconductor tariffs may follow, alongside a tariff offset program designed to incentivize domestic manufacturing in the United States. Such measures could reshape global production networks, raising the stakes for countries heavily embedded in US supply chains.
Securing concessions and protecting key sectors
Even as tariff uncertainties loom, Romualdez said Manila was satisfied with several trade concessions secured from Washington. Nearly all Philippine requests were granted, including exemptions covering more than $1 billion worth of agricultural exports.
He also revealed that US-based business process outsourcing firms played a role in ensuring the Philippine BPO sector remained shielded from tariff measures under the Trump administration’s policy framework.
The BPO industry remains one of the Philippines’ largest dollar earners and a cornerstone of its services exports. Safeguarding it from protectionist measures was seen as a critical diplomatic win.
Strategic patience over speed
While a bilateral FTA with the United States could potentially deepen market access, strengthen supply chain resilience, and lock in preferential treatment for Philippine exports, it would also require extensive negotiations covering tariffs, services, intellectual property, digital trade, labor, and environmental standards.
For now, Manila appears to be taking a calibrated approach—consolidating recent tariff gains, protecting core export industries, and ensuring stability for investors before entering into a comprehensive and politically sensitive FTA process.
Romualdez’s remarks suggest that while Washington may be open to formal trade talks, the Philippines is weighing the timing carefully, balancing ambition with prudence in an increasingly complex global trade environment.
As tariff realignments continue to redefine economic alliances, the question is no longer whether a PH–US free trade agreement is possible—but when both sides will consider the moment strategically right.