How the Philippines could win big amid the US China trade battle

MANILA – The Philippines may have caught a rare break under US President Donald Trump’s latest tariff impositions, and it is hoping to turn that into an edge.

Faced with a tariff rate of only 17 per cent, one of the lowest in the region, Manila is moving swiftly to reposition itself as the region’s next supply chain hub, with both government officials and industry leaders pitching the country as an alternative option for manufacturers looking to spread their operations beyond China.

The Philippine Economic Zone Authority (Peza) said in an April 4 statement that the country’s relatively low tariff burden – the second lowest in the region after Singapore’s 10 per cent – makes it one of South-east Asia’s most attractive fallback options for firms fleeing the rising costs and tensions in China.

Peza believes that if the Philippines captures even a 10th of the US$436 billion (S$571 billion) worth of goods that China exported to the US in 2024, it could double its own export volume.

“This is a welcome opportunity despite the challenges,” said Peza.

Trade envoys are racing to convert that opportunity into concrete investment. The country’s Special Assistant to the President for Investment and Economic Affairs, Mr Frederick Go, is currently in Washington to explore tariff relief and even push for a free trade agreement.

Manufacturers are being lured by the Philippines’ competitive tariffs, low labour costs and English-speaking workforce. Among the early movers is Integrated Micro-Electronics Inc (IMI),a home-grown electronics giant with facilities across North America, Europe and Asia, including a major hub in Laguna, south-east of Manila.

IMI is among the world’s top 25 electronic manufacturing service providers, reporting US$1.1 billion in total revenue in 2024.

Its chief executive Louis Hughes told The Straits Times that IMI is already working on finalising