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The tariff exemption on electronic products ordered by United States (US) President Donald Trump would provide the Philippines' top export commodity some relief, according to Japanese financial giant MUFG Bank Ltd.
This will reinforce the Philippines' position among the emerging markets relatively less exposed to the impact of Trump's tariff spree, which is also seen benefitting Filipino consumers by way of downward domestic inflation.
In an April 14 report, MUFG Global Markets Research senior currency analyst Michael Wan said the Trump administration's announcement over the weekend—that smartphones, semiconductors, and other key electronics items are exempted from reciprocal tariffs as well as the additional 125-percent tariffs on China—would greatly benefit, although temporarily, Asian manufacturers.
This exemption would cover US imports estimated at $380 billion, significantly higher than the previously semiconductor-focused $45-billion worth that Trump announced during his so-called "Liberation Day" last April 2.
"The likes of Taiwan, for instance, will see an additional 53 percent of its export basket exempted, followed by 28 percent for Thailand and Vietnam, 26 percent for the Philippines, and 25 percent for Malaysia," Wan said.
"The product mix also varies by market as well, with computer- and data-related exports forming the bulk of exemptions in Taiwan, and to a smaller extent the Philippines," he added.
Electronics and semiconductors comprise more than half of total Philippine merchandise exports, although shipments to the US remain relatively smaller compared to its neighbors.
Earlier data from Singapore-based DBS Group Research had shown that the Philippines' top goods export to the US in 2024 was computer accessories, although valued at merely $3.1 billion. Philippine shipments of semiconductors to the US last year reached only $2.1 billion, compared, for instance, to Malaysia's $16.2 billion.
On the flip side, Wan cautioned that Trump's latest move "could also have meaningful distribution impact across Asian countries, of course, depending on how the semiconductor and electronics sector tariffs are imposed subsequently."
"Assuming there is a 25-percent flat tariff on these electronics products, the likes of Taiwan, Malaysia, and the Philippines could see higher tariff rates relative to China compared to the tariff exemption pause announced over the weekend," he noted.
Separately, MUFG Emerging Markets Research head Ehsan Khoman and research analyst Soojin Kim noted in an April 10 report that among emerging market economies, "Egypt, Israel, the Philippines, and Turkey are the most trade insulated."
Amid the Trump-initiated global trade war, the Philippines' close ties with the US—a former colonizer—would also help, MUFG said.
"The selection of Taiwan and the Philippines as recipients of unblocked US foreign aid suggests emerging Asia's strategic importance to US interests," it pointed out.
As the world braces for the inflationary impact of Trump's tariffs and China's subsequent tariff retaliation—especially in the US—Philippine inflation was estimated by MUFG to fall by 0.9 percent this year.
"At a high level, the first order impact of tariffs is akin to a negative supply shock for the US—driving inflation higher and a negative real income squeeze for consumers," MUFG explained.
"For trade partners, it is akin to a negative external demand shock—driving weaker exports and putting downward pressure on domestic inflation in the tradables sector... With the US standing out facing a stagflationary shock, the rest of the world (that includes emerging markets), is likely to inhibit a disinflationary shock," it added.
In all, MUFG estimates the impact of the US' paused 17-percent reciprocal tariff, alongside Chinese retaliation, on the Philippines' real gross domestic product (GDP) in 2025 at a low of negative 0.7 percent—among the lowest among emerging markets—joining the likes of Turkey, the United Arab Emirates (UAE), Egypt, Saudi Arabia, South Africa, Israel, India, and Colombia.
