Japan-based Toyota Group expects a potential slowdown in the export sales of its automotive parts from the Philippines as demand could dampen due to the tariff policy of the United States (US).

Toyota Motor Philippines Corp. (TMP) reported that its export sales reached $1.2 billion last year, accounting for 30 percent of the country’s total export of vehicle parts and components.

This year, the sales are expected to rise to $1.28 billion.

The Toyota Group is currently maintaining a steady performance in line with this projection, although it has acknowledged that some exporters are having doubts about the global trade environment.

It said that some suppliers are warning that the reciprocal tariffs of the US could dampen export demand, complicating long-term planning for export needs.

TMP and Toyota Group export suppliers recently met with the Philippine Economic Zone Authority (PEZA) to update the agency on its overall outlook for exports.

PEZA Director General Tereso Panga has assured them that the impact of the tariffs will be minimal, given that it varies on each country’s level of trade exposure to the US market.

“In the case of the Philippines, because we are not a heavy exporter to the US, we will be among those least affected, especially with the reciprocal tariff,” he said.

On Wednesday (US time), US President Donald Trump elevated the tariff rate against Philippine goods from 17 percent to 20 percent.

Despite the issuance of new tariffs, the country maintains its position as the second-lowest rate in the Association of Southeast Asian Nations (ASEAN).

Last year, TMP reported that its vehicle sales reached an all-time high of 218,000 units, capturing 46 percent of the total industry sales.

To keep the momentum going, TMP is planning to apply its popular Tamaraw model to the government’s Revitalizing Automotive Industry for Competitiveness Enhancement (RACE) program.

Under the proposed RACE, the government is aiming to provide a total of ₱9 billion in funding for the production of three models of four-wheeled internal combustion engine vehicles.

Each participating vehicle manufacturer is entitled to get funding up to ₱3 billion under the program.

To qualify, a company should bring new investments in the production of an enrolled vehicle model, which shall be launched in the market within two years.

For the local production of Tamaraw, TMP said it has boosted local supply chains, engaging with nearly 60 suppliers.

TMP’s investments in the model have reached ₱5.5 billion, with the Toyota Supplier Network planning to inject ₱500 million for plant capacity expansion.