Resolution of tariff issues needed before US FTA talks -— Ambassador Romualdez

By Justine Irish D. Tabile, Senior Reporter

THE US has signaled openness to pursue a free trade agreement (FTA) with the Philippines, but negotiations can only move forward once a deal on reciprocal tariffs is finalized, the Philippine  ambassador to Washington said.

Ambassador Jose Manuel G. Romualdez said that the US expressed openness to negotiate an FTA during reciprocal tariff talks.

“We mentioned it, and we just said that perhaps this is not the time. But they said that they are open (to an FTA),” he said at the US-Philippines Society briefing on Tuesday.

“ I do not think we are prepared to go into discussions on (an FTA) until we have more or less solidified our agreement on the tariffs. But the Trump Administration is open to having an FTA with the Philippines,” he added.

He said that during the first term of US President Donald J. Trump, his administration had pushed for the FTA.

“We were already on the verge of having some serious conversations on the FTA with the US,” he added.

He also said that the Philippines has been implementing reforms that were previously identified as hurdles to an FTA to happen, including reforming land ownership rules.

“We’ve had successful legislation (that will address US concerns) for an FTA,” he said, referring to the amendments to the Investors’ Lease Act, which allowed foreign investors to lease private land for up to 99 years, up from the previous 50-year limit.

“Right now… we are not really pushing it … because there are other more important things at this time,” he added.

He said on the issue of reciprocal tariffs, “We’ve had a number of conversations with the US Trade Representative, and we have been very happy with the exemptions that we have requested because almost all have been granted,” he said.

“That, I think, has already stabilized our basic request for our trade to be more or less balanced,” he added.

He said the US semiconductor industry has been taking that lead to make sure that chip tariff rates will not be “too upsetting,” as there are many US chip companies operate in the Philippines.

The US business process outsourcing industry has also sought to ensure that the industry will be exempt from tariffs.

“We are still continuing to talk about other issues here and there, but at the end of the day, we are quite happy,” he added.

The US started imposing a 19% reciprocal tariff on most of Philippine goods entering the US market in August.

In November, the US issued an executive order that exempted several agricultural products from the tariff.

This rendered about 46% of Philippine exports to the US in 2024 exempt from the 19% tariff.

Since then, the Philippines has been working on more exemptions, including for some industrial goods.

Mr. Romualdez said there have been continuous talks with regard to the potential Philippine acquisition of aircraft from Lockheed Martin Corp., after the purchase was put on hold in September.

“Lockheed has been talking to us, and we’re finding ways… to finance the purchase,” he said.

“I know our Air Force really wants this, and it’s best right now in terms of what the capabilities of our Air Force are,” he added.

However, he said that the purchase is not feasible given the government’s current budget.

“We’re not closing the door, but it’ll take quite some really imaginative and creative ways to be able to purchase,” he said.

“We need at least a minimum of about 24 F-16 (fighter aircraft). This is a $4.8 billion-$5 billion purchase. We just have to wait and see how we move forward on that particular item,” he added.

The Philippines is budgeting for at least $2.5 billion in defense items between 2026 and 2030 after the US Senate approved a bill that authorized new security assistance.

Mr. Romualdez said most US defense financing will be related to enhancing the capabilities of its ground and maritime forces as well as cyber security.

“It will take some time before we can actually make a firm decision on whether we’ll be able to get the F-16s within the timeframe of a special agreement,” he added.