How today’s trade war shapes Philippine real estate

President Donald J. Trump’s proposed “Liberation Day” tariffs — an across-the-board 10% levy and a targeted 245% tariff aimed at China — are both dramatic and entirely in line with his long-standing protectionist agenda. Whether these measures are ultimately enacted, softened, or abandoned, their announcement alone has rattled global markets and highlighted the fragility of international trade. For the Philippines, the implications go beyond macroeconomics — they are beginning to register across real estate, particularly within the industrial and office segments.

THE PHILIPPINES IS LEVERAGING TRADE INSTABILITY TO POSITION ITSELF AS A SECONDARY MANUFACTURING HUB

Although global trade volatility has revived fears about the long-term future of globalization, the Philippines is actively attempting to turn crisis into opportunity. The Philippine Economic Zone Authority (PEZA) has championed the country as a “China+1+1” destination — a fallback manufacturing location for companies moving beyond China and its first-wave alternatives like Vietnam and Taiwan. This positioning is already bearing fruit. In 2024, 95% of total foreign direct investment (FDI) in the Philippines went to manufacturing, and from 2021 to 2024, the sector posted a 38.63% compound annual growth rate.

STRUCTURAL CHALLENGES CONTINUE TO WEIGH DOWN THE PHILIPPINES’ MANUFACTURING INVESTMENT POTENTIAL

Yet this momentum comes with persistent obstacles. High electricity costs, regulatory friction, and unpredictable policymaking continue to hinder the country’s ability to fully convert investor interest into sustained industrial activity. According to the Department of Energy, the Philippines has the third highest industrial electricity rate in ASEAN — behind only Cambodia and Singapore. In 2024, the country ranked 49th out of 67 in the IMD’s global anti-red tape index and 114th out of 180 in Transparency International’s Corruption Perceptions Index, with a score of just 33. International trade agencies such as the US Department of State and Export Development Canada have also pointed to regulatory inconsistency and political uncertainty as deterrents to investment.

PHILIPPINE EXPORTS ARE 16.8% US-BOUND, HIGHLIGHTING VULNERABILITY BUT ALSO ROOM TO DIVERSIFY

Mr. Trump’s tariff rhetoric has also reignited fears among Philippine exporters. The US is the Philippines’ single largest export market, absorbing 16.8% of exports in 2024 — worth over $12 billion. While electronics dominate the basket (including integrated circuits and office machine parts), the US also buys substantial volumes of coconut oil, leather goods, and agricultural products. Should a proposed 17% tariff on Philippine goods materialize, it could create headwinds across numerous industries.

Still, the Philippines’ export portfolio is not overly concentrated. Japan (14.1%), Hong Kong (13.1%), and China (12.9%) closely follow the US, suggesting that smart policy and market development could help diversify demand and cushion shocks.

A PERSISTENT PRODUCTION SHORTFALL DRIVES THE PHILIPPINES TO IMPORT 7.2 MILLION METRIC TONS OF STEEL ANNUALLY

One of the less visible, yet highly consequential, ripple effects of the trade war is its influence on construction material costs — particularly steel. The Philippines produces just 1.5 million metric tons of crude steel annually, on average, according to the World Steel Association. Domestic output covers only a fraction of national demand, forcing the country to import around 7.2 million metric tons per year. Roughly 67% of these imports come from China, based on 2024 data from the Philippine Statistics Authority.

Meanwhile, China’s share of steel exports to the United States has fallen drastically — from 8% in 2014 to just 2.1% in 2023. With US tariffs pushing Chinese suppliers out of the American market, many of those exports may be redirected to Asia, including the Philippines. As a result, input costs for developers could soften despite global tension — especially for steel-intensive projects in industrial and infrastructure sectors.

WITH US STEEL IMPORTS FROM CHINA DOWN 75%, PHILIPPINE CONSTRUCTION MAY BENEFIT FROM REDIRECTED SUPPLY

Amid rising trade barriers, Chinese steel producers are likely to seek alternative destinations for surplus inventory. As US demand drops further under tariff pressure, the Philippines could benefit from excess supply. Given that 80% of the country’s steel consumption is used in construction, lower prices could directly reduce development costs — potentially accelerating project timelines and making new industrial zones more financially viable.

This is a key consideration in assessing industrial real estate’s medium-term outlook. Falling input costs may catalyze new warehousing, logistics, and manufacturing facility construction at a time when global investors are exploring alternative supply chain routes.

THE OUTSOURCING SECTOR IS PROJECTED TO GROW LESS THAN 7% IN 2025 AMID GEOPOLITICAL UNCERTAINTY

In the services sector, particularly in office real estate, the BPO industry faces its own set of pressures. While trade tariffs don’t directly affect services, the Philippines’ strong reliance on US clients exposes the industry to secondary risks. North America accounts for 70% of Philippine outsourcing demand. The sector also contributed $7 billion — or 9% of national GDP — and drove 19% of office demand in 2024.

IBPAP forecasts slower growth in 2025, with the sector expected to expand by less than 7%. While BPO will remain foundational to the office market, risks from reshoring (returning operations to the US) and nearshoring (relocating to nearby countries) will temper expansion. Still, the sector’s fundamentals remain intact, and strategic interventions can help maintain competitiveness.

LOWERING ELECTRICITY COSTS COULD UNLOCK BROADER INDUSTRIAL CAPACITY

One policy lever that could unlock multiple benefits is addressing energy affordability. In the short to medium term, the government could consider targeted subsidies for energy-intensive industries — especially manufacturing. In 2024, 70.9% of all energy investment pledges were committed to renewable energy. While this signals progress toward long-term sustainability, short-term competitiveness will require bridging the affordability gap.

Vietnam once implemented cross-subsidization mechanisms to keep industrial power costs competitive. Germany has proposed covering up to 80% of power costs for energy-heavy sectors like steel and chemicals. A similar intervention in the Philippines could attract more foreign manufacturers and alleviate cost pressures for domestic producers.

UPSKILLING AND POSITIONING THE PHILIPPINE WORKFORCE AS ‘AI-READY’ WILL SUSTAIN BPO SECTOR GROWTH

The BPO sector’s other challenge is technological disruption. But here, the Philippines shows promise. A 2024 Microsoft Philippines and LinkedIn study found that 86% of Filipino knowledge workers use AI at work — well above the global average of 75%. This positions the country not as a laggard, but as a potential leader in human-AI complementarity.

 By investing in AI upskilling and moving up the value chain — toward healthcare, finance, and analytics — the Philippines can future-proof its BPO sector. Rather than being displaced by AI, the workforce can evolve with it.

STRATEGIC FRICTION IS A TEST — AND AN OPENING

Trade wars are a symptom of a fractured global order, but they also expose underlying weaknesses — and hidden advantages. For the Philippines, the challenge is not only to weather the storm, but to position itself for what comes after. With the right supply-side reforms, forward-looking workforce development, and sector-specific interventions, the country can convert external turbulence into long-term opportunities.

Source: Business World

US Single Retirees Face New Challenges How To Cope

Bill Kincaid and his wife had their retirement all planned out. In 2015, the retired physicians downsized from St. Louis to Washington, D.C., where they enjoyed museums, concerts, and other activities. But two years ago, Kincaid’s wife, Marilyn, died at 76 following complications from chemotherapy. Kincaid found himself alone, forced to recalibrate his life without a partner. “We had each other covered,” says Kincaid, 78. “But stuff happens.”

Challenges are mounting for retirees as the government safety net is in flux and costs mount for health services and long-term care. It can be even tougher for single retirees, whether it’s managing household finances, dealing with health issues, or warding off loneliness—a risk factor for physical and mental health. Solo retirees are now far more prevalent, and more are on the way.

People age 65 and older who lived alone headed 11% of all U.S. households in 2020, up from 9% in 2010, according to the U.S. Census Bureau. About half of women and 29% of men 65 and over are unpartnered, according to a Pew Research Center analysis of census data.

Those figures may rise as more younger adults reach retirement without a partner or spouse. Roughly 38% of the population ages 25 to 54 was unpartnered in 2019, up from 29% in 1990, according to Pew. And 53% were married, down from 67% in 1990.

Contributing to lower marriage rates are greater economic opportunities for women and less societal pressure to marry, social scientists say. Plenty of single seniors are doing fine—happy to be living on their own, with enough savings and help from family or friends.

It’s a mistake to assume that partnered people always have the best outcomes, says Michelle Putnam, director of the Gerontology Institute at UMass Boston. But experts say the country is ill equipped to handle the growing population of seniors, and the singles among them who may be the most vulnerable, needing more health services, long-term care, and financial resources.

“The country just doesn’t have the resources to deal with the people who will be coming down the road,” Kincaid says. “We don’t have enough nursing homes to put people in as we age.” The safety nets that have been in place for decades—Social Security, Medicare, and Medicaid—may now be facing cuts, too. President Donald Trump has vowed to protect Social Security benefits. Yet staff cuts, field office closings, and reduced phone service outlined by the Department of Government Efficiency could make it more difficult for people to access their earned benefits and may cause payment disruptions, say advocates and Democrats. “Any American receiving Social Security benefits will continue to receive them,” White House press secretary Karoline Leavitt said. “The sole mission of DOGE is to identify waste, fraud, and abuse only.”

House Republicans advanced a bill in March that outlined $880 billion in likely cuts to Medicaid over the next 10 years. Jointly funded by the federal government and states, Medicaid provides health insurance for the poor and is the primary funder for long-term care in the U.S., paying 63% of costs for nursing home residents. Cuts may shift more of costs to states, which would have to make decisions of how to allocate limited resources.

The recent selloff in stocks hasn’t helped. The S&P 500 index is down 7.6% from its peak on Feb. 19. Federal Reserve Chair Jerome Powell calmed the market’s nerves on Wednesday as the Fed indicated that two rate cuts are still coming this year. But the market’s bullish narrative is looking shakier, hitting retiree investment accounts. If there were ever a time for solo seniors to take stock of their finances, social networks, and healthcare plans, it’s now.

Here’s how some singles are dealing with the complexities and building a successful retirement.

Build Your Team

When Kincaid lost his wife, he knew he’d need the help of friends. Fortunately, he already had quite a few, thanks to a nonprofit called Village to Village Network. The couple joined their local group when they moved to Washington, and it has become a big part of Kincaid’s life.

“We instantly had 150 acquaintances, some of whom became very good friends,” says Kincaid, now board president of the Village to Village Network. Members of the group provide companionship and volunteer for one another—offering pickups from hospitals, taking care of pets, and helping out with groceries or shopping.

The idea, more broadly, is to create a team for support. Along with providing a social network, team members can include professionals who can help manage your finances and health. Designating a team captain may be helpful, too.

Elder law attorneys or specialists called “aging life care professionals” help clients navigate the services they need and refer them to other professionals if necessary. Attorney Eric Einhart plays that role for clients. “We like to say we have a pit crew for our clients. We wind up becoming the spoke in the wheel,” says Einhart, a partner at Russo Law Group in Garden City, N.Y., and vice president of the National Academy of Elder Law Attorney’s board of directors.

Fix Your Estate Plan and Healthcare Directives

While all adults need basic estate and healthcare planning, it’s especially important for single retirees. This includes appointing a healthcare proxy to make medical decisions if you’re incapacitated, and a living will that outlines the interventions, like breathing support, that you might want or reject. Mary Johnson, a 73-year-old retiree in central Virginia, says that while she’s close to some neighbors and a cousin out of state, she didn’t want to burden them with being her healthcare proxy. She engaged a geriatric care manager to serve in that capacity, and asked friends and family to be conduits if needed. “I’m the kind of planner who likes to have a blueprint,” says Johnson, who has been divorced for nearly 30 years.

Kincaid named his brother in St. Louis as his healthcare power of attorney and communicated his wishes for his care and eventual burial. His local friends know to contact his brother in an emergency. Professional fiduciaries can act as healthcare or financial power of attorney (the term can refer both to the document that names an agent and the person acting in that capacity).

Different people can serve each role, and you can always change your mind and designate someone else as long as you retain mental capacity. Sometimes, older adults try to circumvent the need for a financial power of attorney by adding a relative or other trusted person as a joint owner of their financial accounts.

But that poses complications, says Craig Parker, assistant general counsel of product at estate-planning firm Trust &Will. No matter how much you trust that person, if they get divorced or sued, your assets may get tied up in the proceedings. The terminology and rules for advance directives vary by state. AARP maintains a list of advance directive forms by state on its website.

People with serious chronic conditions or advanced frailty can also fill out a portable medical order, which some states call a Polst or Molst. Put a copy of your healthcare directives on your refrigerator— paramedics are trained to look there, says Steven Barlam, president of the Aging Life Care Association. Don’t lock your documents in a safe, since that can create headaches if you’re incapacitated and no one has access.

Daily money managers, another type of professional, also help older adults manage their finances. They provide support with bill paying and other routine tasks, and some act as a healthcare proxy, financial power of attorney, and representative payee for Medicare.

Financial Planning

Most people wind up alone toward the end of their lives. Financial planning should prepare for that reality. Couples must ensure that both members understand the family finances so the surviving spouse isn’t left in the lurch if the person who managed the money dies first. Widows and widowers must also contend with reduced household income. When one spouse dies, his or her Social Security payments stop.

While surviving spouses might see a bump-up in their own benefits, those households don’t keep receiving two checks. Surviving spouses might find that their new tax-filing status of single pushes them into a higher income bracket for Medicare premiums, an additional financial hit. Even so, managing a portfolio for one doesn’t look that different than for two.

Either way, retirees should hold one to two years’ worth of withdrawals in cash. Say you get $35,000 from Social Security a year but need $60,000 to meet living expenses. You’d put $25,000 to $50,000 in money-market funds, high-yield savings accounts, or another cash equivalent. That way, if the market is down, you’re not forced to make withdrawals on a declining balance, a surefire way to drain your portfolio quicker.

Diane Bresee, a New York City retiree, has a couple of years’ worth of expenses in cash. She topped off her short-term bucket by trimming some appreciated stock before the presidential election. “It felt like the right thing to do,” says Bresee, who is in her 70s. Consider using a set withdrawal rate and keep it steady. A good place to start is 4.7%, according to Bill Bengen, the retired financial planner who developed the original 4% rule but has since bumped it up. This idea, if you’re planning for a 30-year retirement, is to withdraw 4.7% from your portfolio each year, adjusted upward for inflation; assuming a standard portfolio of 55% stocks, 40% bonds, and 5% cash, keeping withdrawals at that level offers a high likelihood that your money will last for 30 years. For a $1 million portfolio, you could withdraw $47,000 the first year and $48,410 the next, assuming 3% inflation.

The rule is customizable based on your circumstances—for example, people retiring in their 70s could safely withdraw more than someone with a longer retirement horizon. Bengen tested his withdrawal rate across a broad swath of market conditions and found that it holds in down markets. Still, for peace of mind, some retirees may prefer skipping the annual inflation adjustment following years when their portfolio has lost money. Bengen’s rule applies regardless of portfolio size.

But single women, in particular, may have a smaller nest egg than men or couples. Bresee, for example, worked her way up from being a bank teller in the 1970s to making multi million dollar deals in institutional fixed income sales. “I got 50% of the pay the guy next to me got, so I’m starting in the hole,” she says. With a smaller cushion, solo retirees may have to be more mindful of their cash flow, says Tana Gildea, principal at financial advisory firm Homrich Berg in Atlanta. She likes the bucket approach, where you maintain multiple accounts for different purposes, such as near-term expenses, vacations, and healthcare.

To help sort it all, she names each of a client’s accounts for their uses. Many advisors recommend a dedicated account for long-term care. Stand-alone long-term care insurance has become too expensive for most pre retirees. A popular alternative— permanent life insurance with a long term care rider—may be less attractive for singles who don’t have an heir for their policy’s death benefit.

Long-term care can be extremely costly, and many retirees will eventually need it: 56% of people turning 65 today will develop a disability serious enough to require long-term care, according to a 2022 report from the U.S. Department of Health and Human Services. The report defined “disability” as long-term care insurance policies typically do: the inability to perform at least two activities of daily living or the need for substantial supervision due to serious cognitive impairment. Families may decide that their loved one needs support at lower levels of disability, so the number of older adults who will require care is probably higher than the report suggests.

The average duration of disability for women is 3.6 years, while the average for men is 2.5 years, the HHS study found. You can project the future cost of care in your area using Genworth’s online tool; multiply the annual amount by estimated years needed, and put that money aside in a conservatively invested account. If that amount is out of reach, earmark whatever you can—even having $25,000 set aside for future long term care needs can give you some peace of mind, Gildea says.

Dealing With Isolation Money matters tend to get the most attention in retirement planning, but the social component is just as key. Americans overall have become more isolated in the age of Facebook and other social media, and striking up friendships only got tougher after Covid disrupted casual meetups and groups.

Still, it’s important to reconnect and forge new friendships, using old techniques that still work: Jump back into an activity you enjoy and look for groups—whether it’s a weekly bridge game, book club, dance class, or Bible study. Give friends in the group your contact information so they can check up on you if you miss a meeting. A formal retirement community is another option. Johnson has toured some in her area.

Still healthy in her early 70s, she plans to move into one by age 80. In case she becomes incapacitated sooner, she has also lined up someone to care for her cat, Toby. Making a move may not be easy, but it only gets harder in a crisis, and your options might be more limited at the last minute, since many retirement communities have wait lists.

“Taking an action kills the fear and the worry,” Gildea says. Bresee, a former Masters swimmer, is counting on friends and activities to sustain her as she faces the decades ahead. She enjoys yoga, working out at the gym, and auditing college classes in Italian and European history. She does her best to conserve savings, figuring she’ll stay in good health for many more years even as the money dwindles. “My doctor said I’ll live a long time, and I told him I can’t afford it,” she says.

Source: Barrons

How SMEs can survive the trade war

The global economic landscape is shifting again, and this time, the tremors are closer to home.

On April 7, US President Donald Trump announced new tariffs on American imports from dozens of countries, including the Philippines, which faces a 17-percent tariff on its exports.

Other tariffs were also levied on our Southeast Asian neighbors: Vietnam, 46 percent; Thailand, 36 percent; Indonesia, 32 percent; Malaysia, 24 percent; and Cambodia, 49 percent.

Despite local officials' and business groups' optimism about the tariffs, small and medium enterprises (SMEs) will undoubtedly take a hit. As other countries threaten to retaliate with countermeasures, a large-scale global trade war may be on the horizon — eroding business confidence and slowing economic development.

SMEs will likely face higher input costs, disruptions in supplier relationships and lower consumer demand. Even when certain sectors appear shielded or advantaged in the short term, long-term volatility in pricing, procurement delays and retaliatory trade policies can lead to an unpredictable and more expensive operating environment.

These are challenges that disproportionately affect SMEs, which are already dealing with elevated borrowing costs. And while some optimism remains in interest rate cuts due to easing local inflation, the prevailing tone in both the market and the business community is caution.

For SMEs, which make up 99.5 percent of all businesses in the Philippines, this caution is not just prudent — it is essential.

Historically, business success is closely associated with revenue growth, expanding footprints, scaling operations. But in an environment where global policies can shift overnight and supply chains are fragile, adaptability and financial resilience are becoming the more reliable indicators of long-term viability.

First Circle, a financing company providing credit lines to Philippine SMEs, has noticed many of its clients adapting to this shift in business priorities — likely due to persistent inflation and ongoing post-pandemic uncertainty in both domestic and global markets.

While some SMEs are still in pursuit of aggressive revenue growth and market expansion, a growing number are redefining success through the lens of resilience: consistently meeting payroll and supplier obligations; keeping operations lean and maintaining enough financial headroom to navigate disruptions.

For these businesses, stability has become the priority. It means managing risk conservatively and staying operational in turbulent conditions.

Credit line

What does it take to operate with resilience in this economic environment? For all SMEs, the baseline starts with access to fast and flexible financing. Business loans and other traditional debt products, while essential, are often rigid.

In contrast, a credit line offers preapproved access to funds that SMEs can quickly tap into only when needed — without being locked into repayments until disbursement. This kind of financing can mean the difference between surviving a temporary disruption and facing a permanent closure.

SMEs must also focus on using their capital to create buffers for uncertainty. Among the most effective strategies is diversifying revenue streams. This could mean expanding with new product lines, targeting different customer segments or developing alternate sales channels such as e-commerce.

The goal is to reduce dependence on any one market or income source — so that, if one part of the business is disrupted, others can continue to generate cash flow.

Another essential tactic is building emergency cash reserves. While many SMEs operate with tight margins, setting aside a small percentage of monthly revenues into a contingency fund can make a difference when unexpected shocks arise.

These reserves serve as a financial cushion, helping businesses cover payroll, rent or critical inventory during lean periods without relying on high-interest credit or delaying obligations.

These strategic adjustments may require discipline and trade-offs in the short term, but they are key to long-term resilience. Adaptability is no longer optional — it is a core business strategy for SMEs hoping to survive and thrive in uncertain times.

As the world changes, so, too, must our definition of success. For SMEs, it may be time to look beyond growth — and start building businesses that are truly built to last.

Source: Manila Times