- 6 months ago
Join the conversation on SunStar Cebu’s Beyond the Headline, going live on August 1, 2025, with hosts Mildred Galarpe and DJ Moises.
Our guest, Ronilo Balbieran, senior economist and environmental planner from the University of Asia and the Pacific, will break down the impact of U.S. tariff measures on the Philippine economy.
Our guest, Ronilo Balbieran, senior economist and environmental planner from the University of Asia and the Pacific, will break down the impact of U.S. tariff measures on the Philippine economy.
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LifestyleTranscript
01:30In every episode, we move past what's trending and explore what the headlines really mean for everyday Filipinos.
01:38I'm Mildred Galarpe.
01:39And I'm DJ Moises.
01:41Today's conversation centers on a development that might feel far away but could have real consequences here at home.
01:49The new U.S. tariffs, what they are, what they're being implemented, and how they could affect Filipinos across trade, price, and employment.
02:01Joining us today is the senior economist and environmental planner from the University of Asia and the Pacific, Mr. Ronilo Balbieran.
02:11Good afternoon, sir.
02:12Good afternoon.
02:14Good afternoon.
02:15Mr. Mildred and Sir DJ.
02:18Okay.
02:19So, starter?
02:20Yes.
02:20Very interesting.
02:21Just to situate our discussion, tariff is kind of very technical.
02:29Technical.
02:29In a layman's term, sir, can you explain to us what tariff is?
02:33And why should it matter?
02:36Why should I be concerned about it?
02:40Well, basically, tariff is just an expensive word for tax.
02:46So, as we actually sell to other countries, they impose taxes on what we sell to them or what we impose to countries when they try to sell to us in reverse.
03:00So, basically, when we buy goods from the supermarket, from restaurants, these companies impose tax on us, like a value-added tax, like 12%.
03:11So, we pay that.
03:13We may not actually notice it, but it's actually embedded in what we pay for, in everything that we pay as long as there's receipt.
03:21So, you take a look at the receipt, and then there's the value-added tax there.
03:26So, a tariff works in the same way.
03:29So, it's a tax on imported items.
03:33So, as we import goods from the US, Japan, Europe, Australia, etc.
03:40So, we impose some taxes, and that's called tariff.
03:44And then, in relation to our topic today, the international buzzword is the Trump's tariff.
03:53So, because Trump wants to impose tariffs on everything that enters the US.
03:59So, that's basically how I will explain it.
04:03It's an expensive word for tax.
04:05So, just to calibrate us also, some people would say it's primarily economics.
04:14Some people would also say it's primarily political.
04:17But I think what people agree is it's strategic.
04:20So, can you articulate more about why it is economics and why it is political?
04:26So, first, on the side of economics, there are two sides.
04:31So, in relation to economics, you have the government and the private.
04:36So, as far as the private sector is concerned, you don't want so much taxes because it raises the prices of goods.
04:46So, and then goods would tend to be more expensive when there are taxes and there are tariffs.
04:52So, that's the private sector side of economics.
04:54The public sector side of economics, which is government.
04:58So, you want to impose some tariffs because probably this is an opportunity for government to collect more taxes,
05:07raise revenues to finance the government projects.
05:10So, the infrastructure programs of the government, some social programs of the government, health, etc.
05:19So, education.
05:20So, that's the government side of economics in terms of wanting to impose some tariffs.
05:29But from the point of view of the entire nation, as you mentioned about the politics of it,
05:35So, sometimes it will be a decision among our leaders, especially in government,
05:42so to which sector to favor and which sector to not favor.
05:49And therefore, the government thinks that this particular sector can stand on their own.
05:54So, therefore, they will impose less tariffs against imported items that might actually compete against our domestic production.
06:03So, and so you also impose some tariffs on some sectors that you want to protect.
06:11So, for example, the usual political side of the economics of the tariff is on rice.
06:20Now, should we impose tariff on imported rice?
06:24So, the dilemma there is, oh, you want to favor your Filipino consumers with cheaper rice.
06:35So, our Filipino consumers will benefit with less expensive, cheaper rice,
06:41and therefore, they will have more money for other food items.
06:44But at the same time, you will hurt the farmers as you allow imported rice to come into our country.
06:54And so, that would be a typical economic dilemma.
07:00So, which is more important, to benefit our consumers, the Filipino families,
07:06or benefit our Filipino farmers, because they will be hit by very cheap imports.
07:13And so, the decision on how much, whether we will impose tariffs on certain imported items,
07:20and by how much, would be the realm of politics.
07:26And so, and later on, it will translate into whether that particular politician, government leader,
07:34will gather votes during election time.
07:37So, that's the politics side of it.
07:40In terms of strategic, so, if you combine economics, then the politics side of it,
07:46then you will now have a strategic.
07:48First, we talk about strategic in terms of pushing your importance to the world community.
07:57So, for example, I'll give you an idea that why is Trump doing all of this, etc., etc.
08:05So, can he actually do it?
08:07And why is he able to do it?
08:08And why is everybody alarmed with Trump doing all of this?
08:13So, but because he's being strategic, why?
08:17Because if you take a look at the, quote, unquote, the entire economy of the world,
08:22you have America, at least 25%, one-fourth of the world economy is America.
08:31The second largest is China, 20%.
08:34So, we're talking about U.S. and China, almost half of the entire world.
08:41And so, if you're the leader of the biggest economy of the world,
08:46so, it is within your powers to actually take advantage of that particular economic power
08:54towards your international politics.
08:57And that's where you can actually be strategic in handling those particular international affairs,
09:03both politics and economics, to get more benefits for your citizens.
09:09So, that's how we discussed that is in relation to strategies and imposing whatever it is that you have as assets
09:19to get more for your citizens.
09:22Given the longstanding, because you mentioned also that it's strategic, economic, and also political,
09:28given the longstanding relationship between the U.S. and the Philippines,
09:36do you think with the current setup or agreement, do you think that relationship still significantly holds?
09:44Well, with the 19%, if you're talking about the current negotiation, 19%.
09:52So, we can still consider that as relatively low.
10:00And therefore, that favor and that particular history of relationship between the U.S. and the Philippines
10:08is translated or manifested in that particular low tariff rate.
10:15Of course, nothing is final.
10:18And our president and our economic team, the trade negotiators,
10:22are still battling it out to negotiate for a little bit lower so that we will be at par
10:33or at least more competitive than those countries in the last three days.
10:37We've seen our quote-unquote neighbor competitors negotiating further lower rates.
10:45So, for example, Japan, then they negotiated all the way to 15%.
10:50And then Europe negotiated again for 15%.
10:54So, we might as well negotiate a little bit more.
10:59So, these things are within the decisions of President Trump.
11:05So, if we can argue our case, President Trump,
11:08you may want to consider bringing it further down to 15%.
11:13So, at least we're at par with Europe and Japan.
11:17Or at least we can negotiate a little 1% to 2% more because, for example...
11:24Oh, I think there's a technical glitch on the end of Sir Ronilo.
11:33But while waiting for him to be back online...
11:38Actually, the reason that I asked those two questions is that we've been hearing so many perspectives
11:47that it's good for the Philippines and it's bad for the Philippines.
11:52So, I'm just interested that, of course, there are puts and takes.
11:56We cannot have everything.
11:57But at least, where are we positioned?
12:00But my question, actually, DJ, is like, if it's 20, now it's 19, how much...
12:08What was it before?
12:10Ah!
12:11Right?
12:12Okay, basically, it's just only 18 or 15%.
12:15So, how is the 5% increase affect us?
12:18So, what was the figure before President Trump increased it to 20 and now 19%?
12:25And second is, aside from the imports, because my simple understanding is like, you know, our
12:35furnitures, the thing that we export, electronics.
12:39Electronics, for example, so it's when it gets into the U.S., semiconductors, right?
12:44The chips.
12:45Yes.
12:45And it's being exported to the U.S.
12:47How competitive it will be.
12:49How competitive it will be with the one from Vietnam.
12:51Agreed.
12:51The one from...
12:52So, how will it affect the electronics, the manufacturing industry?
12:56Agreed.
12:57And yes, it's the industry for the private sector, but down to the labor sector.
13:02Correct.
13:03Because they are also employing Filipinos.
13:05Filipinos, so that means displacement, would it, you know, mean displacement of people?
13:11How many, like the PSA latest data says for electronics and semiconductors, which is,
13:19I think, they are 50 to 60% of exports, employs 3 million direct or indirect in manufacturing,
13:27logistics, and support.
13:28And the other thing also, which is a deeper potential issue, and we're glad that we will
13:35have our economists also to help us through, it's because speaking of semiconductors, they
13:40also purchase or import raw materials from China.
13:44China, so...
13:45And China also had higher tariffs.
13:48Tariff, so it's connected, so...
13:50Correct.
13:51Will this be a trade war?
13:54I mean, but yeah, it's so here.
13:57The discussion of tariff is so in the clouds.
14:01How can...
14:02Okay, there you are.
14:03Okay.
14:04Sir Nilo, welcome back.
14:06And we had our own conversations already.
14:08We had our own conversations already.
14:09No, no.
14:12Actually, I asked DJ earlier that we've been exporting our goods, electronics...
14:21Semiconductors.
14:22Semiconductors.
14:23Semiconductors, the chips, which is very important to the U.S.
14:27Why is it so important?
14:29Why it's so relevant about the U.S.?
14:32Is it because they're the biggest market for exports to us?
14:39Yes.
14:39And number one, U.S. is around 19% of our exports.
14:48So, and, no, sorry, around 15%, 15% of our total exports.
14:57And China's roughly around 15%.
15:01So, and then the rest are, you know, some 5%, 4%.
15:07So, U.S. remains to be the largest market of our exports.
15:12And then, in relation to our exports by commodity, it would be electronics that has the largest share.
15:22So, and so that's very, very important.
15:26So, I think some 73% of our exports to the U.S. is actually electronics.
15:38So, electronic products.
15:39So, and that's why it's very, very important that we understand the context of which, of what we are talking about and in relation to the 19% tariff.
15:52So, because while we are talking about the 19%, a large part of our semiconductors are not part of that 19%.
16:03It's actually covered under another agreement, which is the IT agreement or information technology agreement that U.S. chose to honor.
16:13So, that's an agreement or a World Trade Organization, et cetera, et cetera, et cetera.
16:18So, our export to the U.S. is for semiconductors is, I think, roughly around 1%.
16:26So, that is not covered.
16:29And that's very important for us because that will be a huge blow if that is part of the 19%.
16:35So, that's how we will put that into context.
16:40So, what we're saying, just to translate it to everyday Filipinos or the employees working in the semiconductor industry.
16:51So, we're actually saying that for now, there is no impact in terms of their employment in companies that are exporting semiconductors.
17:04Is that correct?
17:04Yes, yes, yes.
17:05That's very important.
17:06And I think that was, I think, one of the most important items that we are monitoring.
17:13So, whether that particular tariff regime will change.
17:19So, so far, what we are hearing from the economic team, from our present trade negotiators, is that that remains to be safe.
17:30Well, that remains to be safe.
17:32So, but the other parts.
17:35Like garments.
17:37Garments, furniture, jewellery.
17:41Those are the ones that are really have a high risk of being affected with this 19%.
17:48So, they are not as big as the semiconductors.
17:52But they are equally important because these are labor-intensive industries.
18:00So, you cannot just turn off.
18:04That's like machines of the semicons.
18:07So, you cannot just turn off laborers.
18:09So, that is, this is relatively small.
18:13But these are, you know, very, very important as far as our socioeconomic development is concerned.
18:19So, and that's why countries around the world are, you know, to the point of giving away everything just to negotiate with Trump.
18:30Trump, please, don't do this to us.
18:32So, I think in one of the statements of Secretary Goh, no?
18:37So, we should, in a way, we're sad, but in a way, we should be happy because look at what Vietnam, what Vietnam gave away just to get the reduction from 46% all the way to 20%.
18:53They almost gave away everything, no?
18:55So, almost 0% tariff on all imported goods from America, no?
19:02So, and that's going to hurt many of their domestic industry if U.S. goods will be flooding their country.
19:14But let's hope, no?
19:17It's not, no?
19:18American goods are generally more expensive, no?
19:22So, and so that would be the fighting chance of the Vietnamese as well as the Filipino domestic manufacturing sector.
19:29Yeah, because the Philippines also negotiated for 0% on imports.
19:36Yes, on, we were told on automobiles, pharmaceuticals, but not in the widespread 0% tariff on almost all goods as in the case of Vietnam.
19:51So, those things, no?
19:56So, these are moving parts all the way, no?
20:01So, I think over the next three to six months, we will see further movements as we actually further negotiate.
20:08Well, the negotiation is ongoing, but at least for Filipinos to prepare, no?
20:13Especially for those who are vulnerable.
20:15When will these agreements eventually take effect?
20:20Well, we were told that they should take effect today, August 1.
20:24Yeah, August 1, yeah.
20:26Okay, August 1.
20:27So, a lot of these tariffs will take effect today.
20:30But, you know, the president, President Trump can always change his mind on Monday, next month, etc.
20:38Yeah, on Monday, no date.
20:40No date.
20:41Just Monday, no?
20:42Just Monday.
20:43They actually gave another, from what I bred, no?
20:47They gave another three months pause for China.
20:51So, hopefully, we will have another time, no?
20:58An opportunity to negotiate.
21:01So, remember, we were coming from 17, and then it became 20, then it went down to 19.
21:08So, perhaps, we can still pray that our exporters can expect lower tariff rates going to the United States.
21:24Otherwise, we will be compelled to either sell at a higher rate after tariff to American buyers,
21:33or we will now really have harder efforts to look for other markets like Europe, Japan, Australia, etc.
21:46So, to redirect the destination of our exports.
21:53Okay.
21:53So, before the 20% and now 19%, how much was it before?
21:58Before President Trump, you know, changed all the tariff schedules?
22:04Well, before the 20%, it was 17, no?
22:08Wow.
22:09The first round.
22:10The first round was 17.
22:12And that's why we were so happy.
22:15In the first round, when initially it was announced by President Trump,
22:20So, we were so happy that our neighbor competitors, Vietnam and Indonesia were really up there, no?
22:30Vietnam was 46%, and us was 17.
22:34So, why is that important?
22:36It is important because if we're the second lowest, Singapore was the lowest at 10%,
22:42and then we were 17, and then Vietnam was 46%,
22:46it was a huge opportunity, a huge advantage to attract, to lure manufacturers, investors from China
22:55to relocate to the Philippines and export from the Philippines.
23:02So, between 17% for the Philippines and 46% Vietnam, no?
23:11So, no-brainer.
23:12So, they will relocate to the Philippines.
23:15However, things changed, and then after the negotiation, Vietnam had 20, no?
23:23So, from 46% to 20%, and our 17% became 20%.
23:29And so, the advantage was wiped out, no?
23:36So, now, after the President negotiated it, no?
23:41So, from 20%, it became 19%.
23:44So, we have that 1% advantage.
23:49But prior to the reciprocal tariffs, et cetera, et cetera,
23:53So, the tariffs were on a per-product, per-country basis, no?
23:59So, we have the negotiation on a per-product basis, no?
24:05So, or there are, meron kang tinatawag, you have this thing called bilateral agreements.
24:12So, Philippines, it's not just the U.S., no?
24:15So, in fact, almost equal to the size of our export to the U.S.
24:22is our export to China.
24:23So, it's not just entirely U.S., no?
24:28So, we're not purely dependent on the U.S., no?
24:30So, again, so, for example, prior to this reciprocal tariffs, no?
24:34So, you have the case of our Semicon at 1% under another agreement,
24:41which is the Information Technology Agreement, no?
24:44So, and then, so, you will have, I'm not very familiar, the exporters.
24:50Perhaps you may want to invite some exporters to run you down the details of the specific tariff rates per item, no?
25:02So, they call it mga commodity codes, no?
25:06So, and so, you have some 10 to 15% for certain items, certain furnitures, certain jewelries, certain electronic products, no?
25:17So, et cetera, no?
25:19So, those are individuals, no?
25:22So, now, when Trump arrived, then you will have all these, some blanket, no?
25:30Reciprocal tariffs, and then, now, as expected, he's just using his economic might, as I mentioned a while ago,
25:42that he's 25% single-handedly, the one-fourth of our global economy.
25:48He's just using it to force everyone to have a better deal for the U.S., no?
25:56So, that's my explanation.
25:58Sir, the increase in tariffs from 17 to 20, and now 19, do you see this as an opportunity, also, to consider, you know, looking for other markets aside from the U.S.,
26:14and at the same time, you know, further develop our export products.
26:18Let's say, for example, agriculture, like, with the U.S. increase in tariff, it's the bananas in Davao and the coconuts.
26:27So, you said earlier, it's a labor extensive, and they're in the rural areas, so, if the 19% takes effect today,
26:38when do you think is, you know, well, the impact on labor especially, because, you know, it's the labor that is, translates tariff,
26:50security of tenure, security of tenure, because right now, if people, if, you know, our discussion on tariff, the ones watching us now, what is that?
27:02But if, if, if your father who's sending you to school suddenly gets unemployed because of that one, then people gets to understand why it matters.
27:13You're very correct, Ms. Mildred, so, as I talked to, I was actually in Cebu some two weeks ago, so, I was really talking to some exporters of furniture and jewelries,
27:30and they were really quite concerned about their, about their laborers, so, because, so, for example, for that 20 or 19%,
27:42the total effective tariff that will be imposed on the products will range between 30 to 40%.
27:50So, if you're an American buyer, and you're, the, the things that you previously purchased now increases its price by, by an additional 20, 19%,
28:07and that would be a stretch to your budget, and so, therefore, prices will go up, demand will go down, and therefore, our exporters might not be able to sell anymore to the US.
28:20So, so, so, and that's why, quote, unquote, they are cramming, cramming in terms of looking for other markets as soon as possible.
28:30At the same time, they're trying to talk to government as far as what are the possible subsidies or support that can actually cover some of their operating costs,
28:42or some, quote, unquote, some, you know, some, quote, unquote, unemployment, unemployment support as they try to actually navigate and switch markets,
28:54and perhaps, so they can have some, some subsidies and support, so while there's no orders yet,
29:02then they can continue supporting their employees and, and, and, uh, as they negotiate, uh, contracts to other, uh, to other markets.
29:13The, the, um, the most immediate that, uh, we can actually, uh, shift to from the US, again, are the, the wealthy, uh, Chinese market, no?
29:25So, uh, it's very difficult to, to, to, to really shift because, uh, America is the single largest buyer, uh, they have big, uh, purchasing powers, no?
29:37So, it's not very easy to, to replace that kind of market, no?
29:41So, uh, but, uh, the China is, uh, getting, uh, getting richer, especially the, the richer Chinese, so we can actually, uh, shift our markets there.
29:55Uh, to, uh, to, to Europe, no?
29:58So, these are, um, and then, I think, uh, a portion of, uh, a portion of India, a portion of, uh, Singapore, South Korea, Japan, no?
30:12So, these are, but we are, uh, again, it's, it will take time for us to, to shift, no?
30:18So, that's why, uh, for our businesses, uh, it would be parallel efforts, no?
30:25Talk to the, to our government, whatever help we can, uh, assist them with in relation to talking to our American counterparts, so how we can further negotiate or, uh, bring down some of the compliance costs, no?
30:41Uh, I heard that, uh, there's so much, uh, compliance documents that our exporters need to fill up before you actually export, no?
30:50to the U.S., no?
30:52So, sometimes, those actually, uh, require additional costs, no?
30:57So, if we can actually, uh, talk closer, uh, uh, with our export markets, then, uh, that can actually help, no?
31:08So, secondly, um, we can also shift.
31:13Now, this is an opportunity, this is, uh, a blessing in disguise in relation to us shifting to higher value added, no?
31:21So, instead of just, uh, exporting, uh, bananas, uh, mangoes, et cetera, this is an opportunity for us to, uh, further manufacture, uh, uh, our, our basic goods, no?
31:36Uh, into higher value, so, uh, uh, manufacture, again, uh, your, your, uh, uh, your mango becoming dried mangoes are, uh, is a very, very, uh, important, uh, example in terms of shifting to value added, no?
31:51So, uh, it, it, it really, um, uh, raises the level of, uh, uh, of margins in terms of shifting our basic commodity to higher value added.
32:05Then semiconductors, uh, what else can we do, no?
32:09So, instead of just, uh, basic assembly, so, we might as well, uh, try to, uh, have into more detailed, more gradual portion of manufacturing, no?
32:22So, and I think the Department of Trade and Industry and the Board of Investment, um, uh, are doing their best in terms of attracting, uh, higher value added manufacturing, uh, high-tech
32:35industries, no?
32:37So, uh, manufacturing of, uh, solar panels, uh, ammunitions, um, so, um, other computer gadgets, uh, that can be manufactured here, uh, in the Philippines.
32:52So, and they're doing their best now.
32:54So, that, in a way, um, uh, neutralizes the, the losses, the expected losses that, uh, we expect from this, uh, from this tariff.
33:06Now, uh, again, if you compute it, uh, in terms of aggregate, the impact on our total economy is actually, uh, relatively small.
33:17Uh, but, of course, if you zoom in, in terms of lives affected and small businesses being affected by this disruption, uh, this is really rather dramatic as far as that, uh, particular case is concerned.
33:32But at the same time, this gives us an opportunity to get into the value added.
33:37And then, I think, uh, if I may add a third point, no?
33:40So, uh, for the first time, for 2024, no?
33:44I think our audience would be, um, interested to know that our export of service has actually overtaken the export of goods in 2024.
33:56Uh, so, uh, meaning, uh, really the Filipinos, no, from some 50, 70 years ago that we are an agricultural economy, uh, we, we then went into industrialization.
34:11Manufacturing.
34:12But we actually skipped the entire phase of industrialization and went to services.
34:18So, and, uh, so that's why we went into real estate instead of agriculture, we went into banking, we went into, uh, we went to, uh, uh, uh, transportation and storage.
34:33So, these are services, no?
34:35So, in the landscape of international trade, uh, what, what the data show is that we realized export of goods is really rather,
34:48difficult, especially in a very globally competitive world out there.
34:53So, uh, many of our creative, uh, Filipino entrepreneurs jumped into the bandwagon of export of services.
35:03And what are these export of services?
35:05These are like BPO's, no?
35:07So, uh, and then higher level BPO's.
35:10So, for example, uh, you would be surprised to know that, uh, we are, uh, we are growing our market in terms of,
35:17in terms of architectural renditions.
35:19So, uh, because architects and engineers around the world are getting older.
35:24And so, um, the construction companies, architectural services companies, uh, around the world are actually sourcing their architects from the Philippines in Makati and BGC.
35:39And we're just sending our outputs in digital form, uh, to those clients abroad, no?
35:45So, and therefore, you will have those services, architectural services, engineering designs.
35:50And you'll be surprised to know that, for example, our influencers of, uh, the usual, you know, the Facebook, uh, Google, YouTube, TikTok, et cetera, et cetera, that are being paid in dollars.
36:02These are export of services, uh, and in, in the aggregate, in the aggregate, in 2024, uh, the, uh, the export of services has overtaken the export of goods.
36:19Now at 3.4 trillion pesos versus a 3.3 trillion total export of goods.
36:27So what am I saying?
36:28I'm saying is that this is really, there is really something there.
36:32And so I think that the power of the Filipino people and the Filipino entrepreneur is that we're crazy.
36:39We are creative.
36:40We are innovative.
36:41We will always find a way not, not to die.
36:46So we're resilient.
36:48With or without the government, we will survive.
36:50And so we found a way to earn money through internet.
36:54So, and so we sell our services through the internet.
36:58So imagine if we can actually combine goods and services as we export them.
37:06So on the, on the side of goods, we increase our value added.
37:10On the side of services, we can actually sell more.
37:13Continue to grow.
37:14You'd be surprised to know that there are, that are, there are a lot of virtual assistants living in Manila that are actually serving the bosses,
37:22old senior executives in Europe and in America.
37:26They're, they say there are about three to five million of them in the country.
37:30But will they be covered by the tariff?
37:33No.
37:34That's the good news.
37:35So this is really a landscape of us, no?
37:39That we can leverage.
37:41Some Filipinos, many actually, some millions of Filipinos and many small businesses have actually transitioned into making more money and making more margins in services through the internet.
37:58So, and this is what you call digitally delivered services.
38:03So, no shipping costs.
38:05Because there are, there are two types.
38:07We have, you order online.
38:08Yes.
38:09But you have to deliver physically.
38:11Yes.
38:12But there's a, you, you order online, but you deliver online.
38:17Online.
38:18Like, like this one.
38:19Like what you're doing.
38:20Yes.
38:21Later on, this will be, will be watched by the entire world.
38:25And what's your effort here?
38:28The one hour, two hours of effort here.
38:31But it will be watched millions of times and you will be generating dollar revenues with this particular podcast or this streaming.
38:40Okay.
38:41So this is digital service.
38:43This is digitally delivered service.
38:45And when you earn dollars from here, this will actually contribute to our export of service.
38:50So that will actually trigger and contribute to our total international trade.
38:58So, so those are the three things, no?
39:00So to, to, to, uh, some of my points, no?
39:04So one, we continue to negotiate and coordinate with our current and potential, uh, markets.
39:11Number two, we entertain, uh, more value added into our goods that we export abroad.
39:17And number three, consider, uh, more, uh, in terms of, uh, export of services, which is not covered by this messy negotiations on the tariff and the trade wars.
39:30So this is a good kind of conversation that our viewers will have better appreciation, no?
39:38In the context of producers and also workers.
39:43But what about consumers, no?
39:45Maybe we're also interested overall, how will this impact the price, no, of goods?
39:52Will they overall go up or overall go down?
39:56Okay.
39:57If you are consuming, uh, uh, American goods, so then, uh, we can expect that American goods will be, uh, will be cheaper.
40:08Uh, so some American produced or American brand of, uh, of, uh, cars are expected to have a fierce competition against Chinese branded cars.
40:23Yes.
40:24And if that competition, uh, becomes more intense, uh, China brand versus U.S. brand, then they will, uh, further bring down their prices and that can only be better for our people, no?
40:38So, uh, uh, uh, and of course every family, uh, every, um, Filipino, uh, is dreaming to have their own, uh, brand new car, no?
40:48So, uh, and this should be only be good for us, no?
40:52So not just on the U.S. cars, but it will trigger a set of, uh, competition and then that will trigger, uh, further decrease in the price of cars, no?
41:03As far as goods are concerned, no?
41:05So, um, if, for example, uh, U.S. will really levy or impose higher tariffs on China, then Chinese goods entering U.S. market will become more expensive.
41:23Yes.
41:24And therefore demand will decrease.
41:25So they will be looking for other destinations for those Chinese produced goods.
41:31And where will they go?
41:33They will go to the Philippines, no?
41:35So, and they will be, uh, they will be selling, uh, those Chinese, uh, goods, uh, at a discount.
41:43Because, uh, it was originally, they were originally, uh, destined for the U.S., but, uh, the U.S., uh, the American consumers could no longer buy them.
41:54So therefore, okay, sige, uh, let's sell it to, uh, the Philippines, Vietnam, Indonesia, these, uh, countries with very high, uh, uh, population numbers and population growth, no?
42:08So we will receive them.
42:09So this will now be, uh, cheaper.
42:13So, of course, that's, that is, uh, somehow, uh, scary and riskier for our domestic manufacturers.
42:24So, so that's where, uh, BSP and, uh, the national government through DTI, uh, and DOF will come in, in terms of, uh, tempering, uh, the potential for dumping.
42:39So in economics, you call that dumping.
42:42So what is dumping when you just, uh, dump all the goods at below production cost, no?
42:49Just because, uh, China just doesn't want to have all the losses, no?
42:54So they, they will just dump at whatever price so that they can just, uh, get rid of, uh, those goods, uh, at least for some, some revenue, no?
43:04So, so we will have to, uh, monitor that and prevent that from happening, no?
43:11So that Chinese goods will have to be, uh, legitimately priced, uh, reasonably priced, uh, in relation to our products as well.
43:21Because next thing we know, uh, we will be killing our, uh, uh, our small, um, small businesses who are into manufacturing of these compete, compete, competitive, uh, products against China.
43:36So, but in general, um, this should trigger lower prices, uh, for imported, uh, imported goods.
43:47This is not good for our international, uh, trade position because we have a huge trade deficit already because a lot of what we eat, uh, is actually imported.
43:58A lot of, uh, what we build, uh, for our construction industry, a lot of that are actually, uh, imported, no?
44:07Cement, steel, fabricated metals, heavy equipment, cars, et cetera, no?
44:12So, um, but in relation to our, uh, consumers, uh, we welcome, uh, cheaper goods from these countries, uh, battling it out in relation to the trade, trade wars that are, that is actually happening.
44:31So, um, is there a relationship or will this increase in tariffs also affect, uh, the, the stability of the peso?
44:42Considering, you know, we're, we're paying debts in, in dollars, we buy fuel in dollars, will this have an effect?
44:48Um, um, uh, the, um, definitely, yes, no?
44:53So, as to how much is the effect, uh, it would now be, uh, determined by how the Banco Central ng Pilipinas, uh, can actually manage the fluctuations here, no?
45:06So, for example, so, if you actually have this kind of situation, no?
45:12So, then, if you have, uh, imports really flooding the, flooding the Philippines, no?
45:20So, then that is actually a, um, uh, a trigger for a much higher exchange rate, no?
45:28So, so, so this would lead to a, um, a depreciation of, uh, the peso, but a depreciation, no, for the, for the benefit of our, uh, viewers, listeners, is not entirely bad for the Philippine economy, no?
45:46So, in fact, it's an automatic stabilizer.
45:49If you depreciate it, then you actually, uh, have a, more or less a blanket, uh, protection against our domestic manufacturers,
45:57and you actually multiply the OFW remittances, uh, that our Filipino families receive here, no?
46:07So, what you don't want is for the depreciation, uh, to go very fast, very high.
46:14So, for example, it will depreciate by 5 to 10%, no?
46:18So, uh, for example, uh, us hitting, uh, what, uh, 65, uh, all the way to 70.
46:26That would be very hurtful for our entire economy.
46:31Now, but a little bit of depreciation of 3 to 5%, uh, is actually, now, good for our economy because you more or less have some,
46:42parang ano rin yun, eh, parang tariff din kasi yun, eh, pag nag-depreciate yung peso natin.
46:47So, from, for example, 55, naging 58, all the way to 60, it somehow is a tariff against all foreign products entering the Philippines.
46:58So, in a way, that would be an automatic shield, uh, of our economy against dumping, uh, possible dumping from China, no?
47:09So, that actually raises the, automatically raises the price of Chinese goods entering the Philippines, no?
47:16But, uh, again, uh, so, the one that, that manages this is the Banko Sentral ng Pilipinas.
47:23And, you know, the, the officers of our BSP are one of the multi-awarded, uh, across, uh, across countries around the world, no?
47:32So, talagang mga, uh, globally recognized, uh, economic managers yung ating BSP officers.
47:39And, um, and number two, we have a, we have, uh, a large amount of dollar reserves that can actually help our, uh, BSP officials to actually manage, uh, and regulate, uh, the fluctuation of our exchange rate.
47:56You cannot manage the changes in the exchange rate if you don't have any dollar reserves.
48:03So, that's what happened to the Asian financial crisis when some of our neighbors ran out of dollar reserves.
48:10And so, therefore, they could no longer release or buy dollars because they don't have dollar reserves anymore.
48:16It's good news for our, uh, viewers and listeners, no?
48:20So, the Philippines has one of the largest dollar reserves, uh, in the world, in terms of the months of import cover.
48:28The, the number does not mean anything, but the, the dollar reserves divided by the monthly imports.
48:35So, you want a number that is greater than three months.
48:39So, three months, just like your ATM, whatever is in your ATM, it doesn't matter.
48:45Divide it with your monthly expense.
48:47You should have a number of at least three.
48:49It, it means that when you get fired, you have three months to look for work.
48:53For countries, countries must have three months of dollar reserves, no?
48:59And our country has been, for the longest time, for the last two decades, have had between seven to ten months of import cover.
49:10Uh, for reference, uh, for reference, China has between 12 to 18.
49:15America, Canada, Australia, European countries has between two to five months of, uh, dollar reserves.
49:25So, we have huge amounts of dollar reserves to really manage this potentially, uh, hurtful, uh, fluctuation of the exchange rate because of this, um, because of this, uh, tariff force, as mentioned by, uh, Ms. Mildred.
49:43So, that's a, that's a, that's a very good, uh, question that I think, uh, the, the businessmen are, uh, waiting for in relation to our talk.
49:52Yes.
49:52And, and, and, and, and going back on the, on the consumer, no?
49:57So, we can anticipate that, um, there will be more made-in-USA products, no?
50:04That are on sale, no?
50:07So, how will this impact also?
50:10Let's, let's just categorize our consumers, no?
50:13It sounds like this benefits the A and B, but what is it impact, how does it impact the C and the D, you know?
50:20The, the, the middle class?
50:23Yeah.
50:24Yes.
50:24And lower.
50:25Lower.
50:30Well, uh, that's a good question.
50:34Uh, well, uh, because, as we discussed with DJ earlier, sir.
50:43The good news is, yes.
50:47As we discussed earlier with DJ, like, you know, when you write something about tariff, or like we're discussing about tariff now, the word itself, tariff, it's like, you know, it's very expensive word for tax.
51:02But if you just say, they're increasing the taxes, then that hurts, you can immediately feel, if you're any, if you're working for a BPO, then, oh my God, that's a percent less to my salary.
51:14So, um, discussions on tariff is really still, still at the upper level.
51:20So, now that it's taking effect today, uh, how, how and when will it, you know, felt by, by Filipinos?
51:31But I'm interested, when you said that goods will be cheaper, does that mean that, say, for example, this very popular canned good, that is, you know, very expensive, will be now affordable to, to the CD market?
51:49Which, let's say, for example, I always, because my budget only allows me to buy, uh, this kind of beef loaf, let me know if I'm incorrect with my analogy, sir.
52:04Today, I'm buying this local beef loaf, but with this import getting cheaper, I can now, does that mean that I can now afford this kind of, you know, meatloaf?
52:16Better price.
52:16Better price, but, you know, all this marketing, is that it? Am I correct? Or, not really, not making sense?
52:23Oh, yeah, yeah, well, technically, it's correct, no? So, uh, the, the, it's just that the question is whether on the, uh, C&D, you know?
52:32Inca Blast, uh, E&D, uh, would be able to afford it. But, uh, the, um, the insensitive answer to that is, uh, perhaps, no?
52:41Perhaps, uh, they have not been buying it anyway, that particular beef loaf of yours, no?
52:46So, uh, their problem, uh, the E&D, their problem, as actually, uh, uh, shown in the, the recent SWS survey, is that, uh, we're still, the E&D are still struggling for, uh, higher prices of, uh, basic commodities, such as, uh, pork, chicken, uh, yung, the basic vegetables, no?
53:10So, uh, uh, the onions, the garlic, uh, et cetera, no? So, uh, these are domestically produced goods, no?
53:18So, they, those are still their number one, uh, priorities. And perhaps, uh, um, 20% reduction in the price of, uh, steak might not mean anything, uh, for them, no?
53:33So, uh, but perhaps, no? Uh, our poverty rate is, um, going down, uh, with, but of course, with raised eyebrows, uh, as also mentioned by our president, uh, in the first few sentences of his SONA.
53:49So, but, uh, the official numbers, uh, indicate that our poverty, uh, poverty rate is, um, is going down. And so, therefore, uh, these lower price goods, uh, from U.S. and China, uh, can, can only contribute, no?
54:10No? Into increasing our purchasing power, despite, um, our, uh, economic growth, not hitting the, the government target, no?
54:22So, uh, our government has targeted, uh, an economic growth of at least 6.5% in 2023 and 2024, but we did not grow, uh, at that particular speed.
54:36We only grew by 5.6%, 5.6%. So, and that's the demand for salary increases, no? That's why we've had discussions on increasing the minimum wage, et cetera, et cetera,
54:47because that's the result, no? Of our economy not growing, uh, fast, uh, fast enough to actually compensate for increase in population growth, increase in prices, no?
55:02So, increase in, uh, uh, uh, uh, additional expenses when you get flooded, when you get sick, et cetera, et cetera.
55:12And so, the president, uh, talked about all these additional expenses and that's why, uh, in his SONA, he was actually offering, uh, um, coverage, no?
55:23Uh, full coverage by government in many of these things that actually hurt, uh, the families in the D and E classes, no?
55:32So, uh, so, uh, yeah, we're talking about 20 to 30 pesos per person per meal and when you get sick
55:40and then you have to pay for some medicines, uh, goodbye to your meals only to afford your medicines, only to afford, uh, an operation
55:51when you get an accident. So, so, so these things, uh, are the primary, um, the primary concerns of our, uh, consumers, uh, families, because if these things happen to them,
56:04then the unexpected ones, the accidents, the sicknesses, the floods, et cetera, the, their limited budget, limited as it is, will disappear.
56:16And so, um, uh, uh, then, then, then having cheaper goods around you would not matter anymore.
56:26So, so, uh, yeah, yeah. So, that's the, that's the sadder, that's the sadder part, but that's not the, but that's not the, the, the sin of the tariff.
56:36Okay, anyway.
56:37But we welcome, we welcome that.
56:39Yes, sir. We wanted to ask you more questions. There's more questions pa to ask, but we want to, we don't want to keep your time.
56:48And, uh, this means we will be inviting you in another interview soon for more explanations on this matter.
56:56So, sir, thank you very much for your time and for the explanations and clarifications on this, uh, very important, uh, topic that is...
57:07Impacting everyday Filipinos.
57:09Yeah, and it's not properly appreciated on, on what this problem is all about.
57:14Sir Ronilo, thank you very much for your time.
57:17And I look forward to having it in your, uh, very beautiful set.
57:21Yeah, sure.
57:21So that we won't be affected with internet connection problems.
57:24Okay, sir. Thank you very much, sir Ronilo.
57:28And to our viewers, thank you for...
57:30Oh, yeah. And to all our viewers, thank you also for joining us today.
57:34And that wraps up this edition of Beyond the Headlines.
57:38We hope today's conversation helps shed light on the bigger picture of this, behind this story.
57:44I'm DJ Moises.
57:46And I'm Mildred Galarpe.
57:47Good afternoon.
57:49And thank you.
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