While the 19-percent United States (US) tariff imposed on Philippine exports compared to zero duties on certain American goods may seem unfair, private-sector economists said reducing the original 20-percent rate is still a step forward.

Jonathan Ravelas, senior adviser at Reyes Tacandong & Co., argued that the latest tariff deal between the trade giant US and the Philippines remains unbalanced. He said the 19-percent duty on Philippine goods is still too high given that some American products will enter the country tariff-free.

Sharing a similar view as Ravelas, John Paolo Rivera, senior research fellow at the state-run policy think tank Philippine Institute for Development Studies (PIDS), said the tariff deal creates “an unbalanced trade relationship that weakens our external competitiveness.”

“It sends a signal that even long-standing partners like us are not exempt from the shift toward protectionism and bilateral leverage,” Rivera said.

On Wednesday, July 23, Philippine President Ferdinand Marcos Jr. concluded tariff negotiations with US President Donald Trump, resulting in a concession that, while not without risks, is still seen by some economists as having modest benefits.

Oikonomia Advisory and Research Inc. economist Reinielle Matt Erece said that the one-percentage-point (ppt) reduction “may be small but better than nothing.”

“However, this trade deal shows how the US has the upper hand in negotiations, where they were able to get zero tariffs in return. Thus, we may expect an improvement in exports, but an even larger jump in imports of US-produced goods,” Erece said.

Union Bank of the Philippines (UnionBank) chief economist Ruben Carlo O. Asuncion also asserted that “while the one-ppt reduction may seem modest, it translates to tens of millions in annual savings for key sectors like electronics.”

Ravelas identified electronics, garments, and agricultural exports as the industries “most vulnerable” to the latest Trump tariff.

“While some high-value exports like semiconductors may be spared, the broader export base (garments, food products, electronics subcomponents) will feel the impact through reduced demand, lost orders, and potential job losses,” Rivera said.

Given these most recent tariff developments, think tank Capital Economics said the economic hit to the Philippines will be “modest.” However, “the deal does at least help shield it from losing ground to regional rivals.”

Previously, the Philippines was expected to gain an edge in regional trade, potentially allowing it to outperform its neighboring economies.

Capital Economics senior Asia economist Gareth Leather said the impact on the Philippines economy from the trade deal is “unlikely to be huge—the country is one of the least dependent economies in Asia on US final demand.”

Leather added that the newest rate eliminates some risks for the Philippines. With other economies also facing the same rate, the Philippines will not experience total “loss of competitiveness” versus its peers.

Rizal Commercial Banking Corp. (RCBC) chief economist Michael L. Ricafort said the most recent concession remains to have “limited drag” on the country’s gross domestic product (GDP), “as the Philippine economy is less reliant on exports as a source of economic growth.”

He noted that Philippine merchandise exports are “three to five times lower compared to major ASEAN [Association of Southeast Asian Nations] countries on a yearly basis.”

Taking into account the latest tariff developments, Rivera, Erece, and Asuncion see the Philippines falling short of a six-percent GDP growth rate this year.

“It may be hard to reach the six-percent target, and we may only reach around 5.6 to 5.8 percent, especially as typhoons and slow trade improvements may hinder faster growth,” Erece said. Ricafort has a slightly higher forecast range of 5.5 to six percent.

Even lower, Rivera expects the economy to accelerate within a range of five to 5.5 percent. Asuncion sees Philippine GDP expanding by 5.3 percent, missing the downscaled 5.5- to 6.5-percent growth target this year.

Rivera said the potential impact of the relatively higher tariff on the local exports “serves as a wake-up call to double down on domestic productivity, investment promotion, and forging more balanced and mutually beneficial trade agreements, especially one with the US that ensures reciprocity and resilience.”

Meanwhile, Joey Sarte Salceda, chair at Institute for Risk and Strategic Studies Inc., noted that the details of the bilateral trade agreement are being finalized.

“There will be further rounds of talks for key exemptions to the broad 19-percent tariff imposed. The aim is to get even lower tariff rates for Philippine goods,” Salceda said, adding that the goods being eyed for lower tariffs are textile and electronics.

“A Philippines-US free trade agreement (FTA) is becoming increasingly possible. Being a net exporter to the US, we stand to benefit from such a deal,” he added.