As United States (US) President Donald Trump doubles down on his protectionist policies by imposing tariffs on major exporters, American companies face increasing cost pressures—creating an opportunity for the Philippines to capitalize.

In a report, property advisory firm Colliers said companies, particularly manufacturers, that purchase goods from tariffed countries would likely incur higher production costs for the same amount of output.

The US government earlier implemented a 25 percent tariff on imports from Canada and Mexico, and an additional 10 percent tariff on Chinese imports.

“Unless American manufacturers would like to pass these additional costs on to consumers and risk adversely affecting their competitiveness, they need to find a way for their products to remain viable despite the new trade environment,” the report read.

Colliers said the practical alternative for US companies is to cut costs by outsourcing non-core and support functions such as customer service and human resources to countries where labor is cheaper while maintaining the necessary skillset.

In this regard, the Philippines is the ideal candidate.

Recognized as a “cost-efficient destination,” the country also possesses a “pool of college-educated professionals with strong English proficiency and cultural compatibility with Western values.”

The Philippines also holds an advantage largely due to its time zone, as the country’s business process outsourcing (BPO) firms can start their workday just as US businesses close for the day.

“This enables US firms to operate 24/7 without employers incurring the cost of expensive night shifts,” noted Colliers.

With Metro Manila’s vacancy rate at 19.8 percent—partly due to the exit of Philippine offshore gaming operators (POGOs)—BPO firms are primed to take advantage of the present tenant-leaning conditions.

Despite the positive outlook, the report pointed out that geopolitical uncertainties and policy shifts could still trigger unforeseen circumstances.

“A particular concern and it would be good to monitor this, is the side of protectionism that aims to protect jobs in America, which could cause outsourcing to slow down,” it said.

Colliers is urging the government to ensure the proper implementation of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act given these uncertainties.

It said the law’s substantial tax reliefs would help attract more outsourcing firms, particularly in key provincial locations.

Colliers earlier identified CREATE MORE as a key measure in making the Philippines a favorable business environment for foreign investors.