Cebu biz groups urge government action, export diversification

Local

CEBU'S business groups are urging the government to move quickly to cushion the impact of a new United States tariff on Philippine exports, while pressing local exporters to reduce their dependence on the US market by expanding into ASEAN, the Middle East and other fast-growing economies.

The calls came after Washington imposed a 12.5-percent tariff on Philippine exports under a Section 301 investigation.

It’s a move that only further the risks of relying too heavily on a single export destination, business leaders here warned.

The Cebu Chamber of Commerce and Industry (CCCI) said the tariff should serve as a wake-up call for both the public and private sectors.

"CCCI joins fellow business organizations in urging exporters to accelerate diversification into other markets across ASEAN, the Middle East, and other growing economies while continuing to invest in productivity, innovation, digitalization, workforce development, and value-added manufacturing," the chamber said in a statement.

The immediate impact on Cebu's export sector may be limited because semiconductors, the country's top export, as well as coconuts, pineapples, bananas and nickel ore are exempt from the tariff.

But CCCI, the largest business organization in Cebu, warned that manufacturers, agribusiness firms and value-added processors with significant US exposure remain vulnerable.

The chamber also said the latest trade action also highlights Philippines' continued dependence on the United States, its largest export market.

The Mandaue Chamber of Commerce and Industry (MCCI) echoed the same sentiments, adding that the tariff will hit exporters of furniture, fashion accessories, processed food and electronics, whose products could become less price-competitive in the US market.

The additional tariff comes as manufacturers are already grappling with high electricity rates, elevated logistics costs, rising labor expenses and recurring natural disasters, the group stated in a separate message.

Beyond higher export costs, MCCI warned that Chinese products displaced from the US market could be redirected to countries like the Philippines, intensifying competition for local manufacturers.

It also expects shifting trade patterns to put added pressure on Cebu's ports and industrial zones.

To help businesses remain competitive, MCCI urged the government to provide power subsidies, improve port efficiency, streamline logistics and strengthen trade diplomacy to secure alternative export markets.

Business leaders in Talisay City echoed the need for immediate policy support.

"This development reminds us that the global business environment is becoming more competitive and unpredictable," said Carl Cabusas, president of the Talisay Chamber of Commerce and Industry.

Cabusas said government should prioritize measures that lower the cost of doing business, particularly by addressing high power costs, improving infrastructure and providing stronger support for micro, small and medium enterprises.

For CCCI, the tariff reinforces lessons learned from previous rounds of US trade actions over the past two years: relying too heavily on one export market leaves businesses exposed to policy shifts beyond their control.

Meanwhile, they welcomed the government's creation of an inter-agency committee led by the Department of Trade and Industry to strengthen the country's forced-labor prohibition and enforcement framework.

This could help the Philippines seek reconsideration or possible exemptions while improving its standing in the US market, CCCI added.

"External trade policies may be beyond our control," CCCI said. "Our compliance, our competitiveness, and our capacity to diversify are not.(RBE)