Manila may lower Japanese car tariffs to secure zero-tariff banana exports

The Philippines is willing to slash tariffs on Japanese car imports in exchange for zero duties on its banana shipments to Tokyo, a strategy Manila expects could pave the way for the country to become the world’s top exporter of the fruit.

Trade Secretary Cristina Roque told reporters that the government is aggressively pushing to eliminate tariffs on Philippine bananas under its free trade agreement (FTA) with Japan.

“In the end, zero [tariffs], that’s what we want,” she said on the sidelines of the ASEAN Business Media Exchange 2026.

Roque noted that negotiations to update the Philippines-Japan Economic Partnership Agreement (PJEPA) are ongoing, with Tokyo potentially open to the amendment.

To secure Tokyo’s approval on the banana tariffs, Roque said Manila is open to reciprocating by lowering duties on Japanese vehicle imports.

Japanese cars with engine displacements of three liters or below currently face a 20 percent tariff entering the Philippines.

Filipino banana exports to Japan currently face an eight-percent duty from October to March, which spikes to 18 percent between April and September.

Japan remains the largest consumer of Philippine bananas, absorbing an estimated 75 percent to 80 percent of the country’s total foreign shipments.

But while the Philippines still dominates the market, demand has waned in recent years as competitors with significantly lower tariffs edge in.

Rivals like Vietnam, Cambodia, and Thailand are rapidly gaining ground in Japan due to their preferential trade deals.

Roque emphasized that eliminating these trade barriers would not only protect Manila’s market share in Japan, but also cement its place as the top global supplier.

“Definitely we want to reach number one,” Roque said.

The Philippines reclaimed its spot as the world’s second-largest banana exporter after shipping out 2.93 million metric tons (MT) last year, according to the UN Food and Agriculture Organization (FAO).

The surge marked the country’s strong recovery after two consecutive years in third place due to severe pest outbreaks and adverse weather.

The DTI credited the country’s economic momentum to key trade deals like the Regional Comprehensive Economic Partnership (RCEP) and the PH-South Korea FTA. By eliminating or lowering import duties, these pacts gave local producers a distinct price advantage over international rivals.

According to the FAO, Ecuador remains the undisputed global leader, exporting 6.42 million MT last year.

On the broader PJEPA review, Roque reported that talks are proceeding “smoothly and as planned: toward a targeted November completion and signing.

Enacted in 2008, PJEPA was the Philippines’ first bilateral FTA, designed to slash tariffs, spur bilateral commerce, and drive mutual investment. — Dexter Barro II