PHILIPPINES Trends and Developments Contributed by: Patricia A. O. Bunye and Christianne Grace F. Salonga, Cruz Marcelo & Tenefrancia
to the USA reached USD986 million (15.8% of total exports). Despite the 20% reciprocal tariffs to be imposed by US President Donald Trump starting 1 August 2025, economic impact appears limited on local equities since the country is less dependent on exports for growth. However, the Philippine Chamber of Commerce and Industry empha - sised that this development highlights the need to diversify export markets, strengthen regional trade partnerships and enhance domestic com - petitiveness. According to the Washington-based Informa - tion Technology and Innovation Foundation, the USA-China trade war is expanding its global reach and intensifying economic uncertainty. The Hamilton Index highlights China’s rapid rise in advanced industries, while the USA shows a relative industrial decline. Though the Philippines holds a small share of global output, it remains vulnerable, particularly if US tariffs target elec - tronics and manufacturing inputs. Higher tariffs raise the cost of Philippine exports to the USA, potentially weakening demand and reducing domestic production. However, as nearly 75% of Philippine exports to the USA are electronics, composed largely of imported components, a drop in US demand would also reduce related imports. This offset limits the net negative impact on the Philippine economy. Approved Foreign Investments in the First Quarter of 2025 In the first quarter of 2025, total approved foreign investments (FI) in the Philippines amounted to PHP27.99 billion, representing a significant 82% decline from the PHP155.26 billion recorded in the same period of 2024.
South Korea emerged as the top source of FI pledges, contributing PHP12.36 billion or 44.2% of the total, followed by the USA with PHP3.08 billion (11.0%) and China with PHP2.88 billion (10.3%). Among the sectors, real estate activities attract - ed the largest share of FI at PHP10.79 billion (38.5%), while manufacturing and administrative and support service activities received PHP6.14 billion (21.9%) and PHP5.35 billion (19.1%), respectively. In terms of total approved investments, includ - ing those from both foreign and Filipino sources, the electricity, gas, steam and air conditioning supply industry accounted for the largest por - tion at PHP61.98 billion (34.1%), followed by manufacturing at PHP38.24 billion (21.0%) and real estate activities at PHP34.98 billion (19.2%). These investments are expected to generate 31,848 jobs, reflecting a 4.7% decline com - pared to the 33,431 jobs projected in the same period of the previous year, with 60.6% of these employment opportunities attributed to foreign- led projects. In response to these developments, the Depart - ment of Trade and Industry (DTI) announced plans to reassess its PHP1.75 trillion investment target for the year, citing the need to recalibrate in light of changing economic conditions. To enhance the country’s investment climate, the DTI facilitated the ceremonial signing of the Investments Facilitation Network, which brings together 38 government agencies to streamline investment processes. Further, the DTI is intensifying efforts to support local exporters by providing updated tools, digi -
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