July 26th, 2025
Quezon City. Chair Joey Sarte Salceda of the Institute for Risk and Strategic Studies (Salceda Research), says the outcome of President Ferdinand R. Marcos Jr.’s engagement with the United States marks the most comprehensive bilateral package of trade, investment, and defense cooperation the Philippines has achieved since the Japan–Philippines Economic Partnership Agreement.
“This is the closest we have ever come to a JPEPA-style framework with the United States. And we achieved it without a formal agreement. It was accomplished through early action, diplomacy, and strategic alignment,” Salceda said in a presser today at New Dapo Restaurant in Quezon City.
While public discussion has focused on the 1 percent tariff reduction, Salceda emphasized that this is only a small part of a much larger picture. As early as April, the Marcos administration had already negotiated exemptions for as much as 73 percent of Philippine exports under United States Executive Order 14257. This brought the country’s effective tariff rate down to 6.6 percent. After President Marcos’s visit, the rate fell further to 6.3 percent, the second lowest in ASEAN.
“This was never just a 20 to 19 story. That framing is misleading. What the President did was avert a full 20 percent across-the-board tariff through early engagement and high-level negotiation,” Salceda said.
A Historic Package of Gains
Salceda’s presentation outlines a comprehensive list of achievements that match or exceed those of many formal trade agreements:
• 21 billion US dollars in investment pledges, including major projects in green energy, infrastructure, and healthcare
• 6.4 billion US dollars in expanded access to United States defense financing
• 63 million US dollars in new foreign assistance
• Tariff exemptions covering most export sectors, including electronics and industrial goods
• Policy-level cooperation on science and technology, including vaccines, artificial intelligence, and nuclear regulation
“The Marcos administration secured more than just tariff relief. We got strategic investment, security guarantees, and science partnerships. It is the full menu,” Salceda said.
The Widest Mutual Defense Commitment Ever
Salceda also cited a key diplomatic breakthrough. United States Defense Secretary Pete Hegseth declared that the Mutual Defense Treaty applies to Philippine armed forces, vessels, and aircraft anywhere in the Pacific, including the South China Sea.
“That is the clearest and widest expression of the Mutual Defense Treaty ever issued by a United States official. It removes all previous ambiguity. The commitment is now concrete and explicit,” Salceda said.
On the OFW Remittance Tax and Next Steps
Salceda also addressed concerns over the 1 percent remittance tax under Senate Bill 4228 in the United States. He clarified that the law allows exemptions and that the Marcos administration is actively working to secure these by ensuring that Philippine banks with branches in the United States are recognized as qualified remittance transfer providers.
“This is a solvable issue. What is needed is sustained engagement and technical coordination. That is already underway,” he said.
A Strategic Approach
“Countries do not trade their way into strength. They build their capacity first. Then trade follows. President Marcos understands this. This package helps us build—our industries, our institutions, our defense posture. It gives us the best footing yet for a real economic partnership with the United States,” Salceda concluded.
“This is a historic pivot. Let us not get distracted by the small print. We are helping shape the next decade of Philippine–United States relations.”