The Philippine economy is facing significant risks from evolving trade policies under the United States, as highlighted by economist Cielito Habito at a recent forum organized by the Management Association of the Philippines (MAP) and the Cebu Chamber of Commerce and Industry.

The discussions, held on May 30, 2025, emphasized fears of a potential global recession, exacerbated by President Donald Trump’s introduction of protectionist measures.

Habito articulated that global trade appears to be contracting, primarily due to US tariffs and changing international trade dynamics.

He noted that while the direct impact of US tariffs on Philippine exports is a concern, the broader disruption of global value chains could pose an even greater threat to the Philippine economy.

The potential repercussions for the country include a decline in exports to the US, weakened remittance flows from overseas Filipino workers, a reduction in tourism, and intensified competition from an influx of inexpensive Chinese goods, particularly through e-commerce platforms.

Habito asserted that these factors threaten not only local factories and jobs but also the overall stability of the economy.

Trump’s administration has implemented various trade policies aimed at boosting American manufacturing, reducing the trade deficit, and fostering economic growth in the US. Key initiatives have included increased tariffs on imports, substantial tax cuts, stricter immigration regulations, and a rollback of environmental protections and federal oversight.

However, these measures may lead to unforeseen adverse outcomes such as stagnant job growth in the manufacturing sector, rising wages and inflation that could diminish US competitiveness, widening economic inequality, and potential depreciation of the US dollar as countries seek alternative trade currencies.

Despite experiencing growth, the Philippines is reportedly lagging in capitalizing on the positive effects of global trade.

Habito’s analysis revealed that in 2023, exports constituted only 12.7 percent of the Philippine GDP, starkly lower than the figures of its ASEAN neighbors—Singapore at 108.9 percent, Vietnam at 82.5 percent, and Malaysia at 57.9 percent.

According to the Department of Trade and Industry, total exports accounted for 27 percent of the country's GDP in the same year.

In 2023, the Philippines exported $70 billion in goods, significantly less than Indonesia’s $201 billion.

Moreover, even when combined with revenues from business process outsourcing, which reached $37.9 billion, and remittances totaling $38.3 billion, the total still fell short of regional competitors.

Looking ahead, the Philippine economy grew by 5.7 percent in 2024, making it the second-fastest-growing economy in Southeast Asia, following Vietnam.

The previous year saw a growth rate of 5.5 percent, driven by factors such as government expenditure, election-related activities, tourism, construction, and banking.

Nevertheless, challenges persist, including diminishing private investment, slowing exports, high interest rates, inadequate infrastructure, and business operation difficulties.

Habito emphasized that structural issues and a lack of reform are hindering the country’s competitiveness.

On a positive note, projections indicate a decrease in unemployment from 4.4 percent in 2023 to 3.8 percent in 2024, alongside an anticipated reduction in inflation from six percent to 3.2 percent.

As the Philippine economy progresses into 2025, Habito warned of varying influences stemming from both domestic and international developments.

Externally, unpredictable economic conditions in the US, characterized by fluctuating policies under the Trump administration, pose significant uncertainties.

Geopolitical tensions, particularly concerning the West Philippine Sea, conflicts in the Middle East, and the ongoing Russia-Ukraine war, also loom as critical factors.

Internally, the approach to governance during an election year is expected to stimulate higher economic growth, though it may also complicate budgetary processes.

The election cycle is anticipated to result in a politically charged budget process, which could delay essential reforms.

The country continues to face persistent challenges related to human development in domains such as health, nutrition, and education.

The MAP forum at the Seda Ayala Center Cebu included discussions aimed at enhancing management practices, education, and policy reforms to strengthen the Philippine economy's competitiveness.