go through Luisa Maria Jacinta C. Josen, Senior Reporter
19% of the towers in the United Statesff Nomura Global Markets Research said that Phillipine goods can reduce the Philippines’ gross domestic product (GDP) growth by 0.4 percentage points (PPT).
Nomura said in a report that U.S. tariffs on 19% of Filipino goods are “quite high” and present downside risks to growth.
“We probably directlyffECT can reduce our baseline GDP growth forecast through the Philippines’ baseline GDP growth forecast. ”
Nomura said the forecast was “relatively large” compared to baseline growth rates of 5.3% and 5.6% this year and 2026, respectively.
“This is partly because we allocate 10% to the level in the countdown towerff Assuming the Philippines is a powerful ally of the United States, not a transshipment third country, the speed may reach a settlement. ” Nomura said.
“It turns out that despite President Marcos’ visit to Washington, both sides reaffirmed the need for a strong partnership, Tariff Still set at 19%, even above the 17% “liberation day” level. ”
Last week, Philippine President Ferdinand R.
Mr Trump announces 19% of the towerff It will be implemented on Filipino products, which will take effect on August 1.
“So, trading ‘trading’ represents the benefits of Tariff rates, especially in the Philippines,” Nomura said.
“So if these tariff rates are implemented and continued, these could further weigh the growth of both countries relative to our current benchmark forecast.”
The government expects GDP to grow by 5.5-6.5% this year, below its previous 6-8% target.
“While these stadium estimates make sense to us, uncertainty remains high, and these estimates only take into account the direct impact on these ASEAN countries’ exports to the United States,” Nocun said.
These estimates do not consider department towersffIt added that s, for example in semiconductors and pharmaceuticals, is currently exempt.
“However, as our U.S. team stresses, the risks may be set higher, although some countries can be exempted, thereby increasing uncertainty. As mentioned above, trade details with Indonesia and the Philippines remain limited.”
It added: “At the same time, other major trading partners, especially the EU, are still in talks and the escalation of trade tensions may pose additional risks to the region.”
Ministry of Trade and Industry says it is still negotiating fiDetails of trade agreements with the United States to ensure protection of local industries.
A big bill
Meanwhile, a recent large bill by Trump could also affect the Philippines’ economy.
“Although the United States faces direct EffMr. Trump’s giant bill, the Philippines will feelfootERSHOCKS. After 2027, federal funds interest rates are expected to increase after lowering tax rates in the short term. ”
Metrobank notes that this will overflow effBangladesh Sentral ng Pilipinas (BSP) monetary policy and Ects for overseas Filipino workers (OFW) remittances.
“This, in turn, can increase the reverse buyback rate of BSP and hinder domestic consumption. Added that if U.S. GDP growth is crowded by private investment, demand for exports and demand for OFW remittances may also be hit.”
Under the bill, Mr. Trump’s 2017 tax cuts are permanent and new tax relief has been introduced.
“As the United States seeks funds to address increased spending, interest rates are expected to rise, perhaps as early as next year. Rising U.S. interest rates will in turn attract foreign capital, thus keeping the U.S. away from emerging market economies such as the Philippines,” Metrobank said, adding that BSPs could raise interest rates in the Philippines to ensure that the Philippines remains a competitive option for investors. ”
The Philippines Central Bank has dropped by a total of 125 basis points (BP) since the easing cycle began last August. It lowered its second straight cut in June, reducing borrowing costs by 25 basis points and raising key interest rates to 5.25%.
Metrobank said higher interest rates would block consumption and commercial investment, which could slow growth in the Philippines.
It said the slowdown in the U.S. growth could also hit the Philippines’ export sector, which is the main destination for Filipino exports.
“As U.S. economic growth has the potential to hinder, the Philippines’ commodities may face a decrease in demand. Fewer exports are combined with steeper towers.ffS can make trade defiCIT is more intense and weighs overall GDP. ” it said.
Softer U.S. growth could also weaken FDI in emerging markets such as the Philippines, Metrobank said.
Meanwhile, OFW remittances may also be curbed as the U.S. begins its 1% cash remittance tax on cash remittances from the U.S. to other countries in 2026.
“The United States is a hot spot for OFWS, with about 2 million OFWSs in the United States.Florida“The Philippines economy through remittances may be negatively affected by the slowdown in the U.S. growth,” Metrobank said.
About twofiRemittance from the Philippines FloridaOWS is from the United States. The United States is the primary source of remittances fiDuring the Ve-Month period, it accounted for 40.2% of the total latest central bank data.
“If OFWS gets layoffs or even unemployed, this will limit remittances to go home. Remittance payments stimulate household spending, which contributes 78.2% of the Philippines’ GDP.”
BSP early estimates that remittance tax could reduce remittance growth in the country by 0.5 ppt. The central bank expects cash remittances to grow by 2.8% this year and 3% in 2026.
“The decline in remittances has reduced household spending and has caused the ship to sway,” Metrobank added.
