Firm maintains watchful stance on US tariffs, global economy

THE Aboitiz Group does not anticipate a significant immediate impact from the new US tariffs on Philippine exports, but it remains cautious of potential indirect effects if global tensions escalate.

In a media briefing on Monday, April 28, 2025, Jose Emmanuel Hilado, chief financial officer at Aboitiz Equity Ventures (AEV), said the Philippines is not heavily reliant on exports, suggesting that the direct effect of the tariffs would be limited.

“AEV doesn’t expect much immediate impact, but because the global economy is interconnected, any escalation of tensions could create indirect effects,” Hilado said.

AEV is the investment holding company of the Aboitiz Group.

US President Donald Trump has imposed a 17 percent tariff on Philippine goods bound for the US, as part of its “Liberation Day” policy.

Hilado noted that these risks could manifest in the form of commodity price volatility, disruptions in the supply chain, or fluctuations in foreign exchange rates. “We continue to monitor these developments closely and assess potential risks, but so far, there’s no immediate cause for concern,” he added.

Meanwhile, Tristan Aboitiz, president and chief executive officer of Aboitiz Food Group, said that his initial concerns focused on the potential rise in raw material costs.

“Commodities like corn, soybeans and wheat — which are heavily produced in the US — could experience price volatility if sourced more prominently due to trade concessions,” Aboitiz explained. Increased demand for these commodities could drive short-term price hikes, he said.

However, Aboitiz emphasized that in the long term, global supply and demand dynamics, rather than tariffs alone, would play a more decisive role in determining commodity prices.

“My greater concern is whether this trade tension could contribute to a global economic slowdown, which would certainly affect consumption patterns in the markets we serve,” he said. “A global recession would negatively impact demand for our products, although lower raw material prices could also offset some costs.”

Despite these concerns, Aboitiz said he does not expect the tariffs to significantly affect their consumer brands, as these are primarily produced and sold within domestic markets.

“It’s too early to conclude any direct impact, and at this stage, we’re not seeing any immediate effects on our operations,” he added.

2025 capex

AEV has set its capital expenditures (capex) at P105 billion for 2025, up by 37 percent from last year’s, according to Hilado.

He said the majority of the capex will be deployed to Aboitiz Power to finance its renewable energy pipeline and to support its distribution business. The next biggest chunk is allocated to AboitizInfra Capital to fund its expansion in economic estates and tower acquisitions, and then the rest will be in Union Bank for its digital infrastructure expansion and lastly, in Aboitiz Foods for swine farms and development of greenfield research and development farms.

Hilado said the capex will be funded by a combination of loans and bonds and, “on top of what we have to fund in terms of the expansion, we also have a maturing AEV bond of about P5 billion and the callable bond of about P9 billion.”

“But, we haven’t really decided on the allocation (for bonds and loans), because the direction of interest rates, although we know that it’s a downward trend, is still subject to volatility. And what we’ll do is we’ll maximize whatever it’s cheapest for us now, whether it’s bonds or loans,” he said. / KOC