Government pitches Philippines as manufacturing hub

NANNING, China – The Philippine government has dangled its low labor cost, strategic location, and tax and fiscal incentives to entice investors, especially those in the manufacturing sector, to locate in the country.

Trade Undersecretary Ponciano Manalo trumpeted the benefits of investing in the Philippines during a promotion conference on the sidelines of the 12th China-Asean Expo over the weekend.

 “There are distinct advantages of the Philippines (over its neighbors) and these are the rich talent pool, the infrastructure development, typical market access... and the competitive investment incentives,” Manalo said.

He said the high literacy rate and English-speaking population are the strong points of the labor market in the Philippines.

Current growth in infrastructure and the accessibility of the country being near other Southeast and East Asian markets would be convenient for enterprises especially for those creating an assembly line for the manufacture of products.

During his presentation Manalo enumerated manufacturing investment opportunities in the Philippines such as those for the assembly of bicycles, electric bicycles, electric vehicles, light vehicles, trucks and buses. 

Manalo also said the country is a good location to locate light manufacturing industries including high-end garments, bags, and related textile manufacturing especially for export.

He further added investors engaged in the manufacture and assembly of solar photovoltaic systems, electronic and electromechanical items particularly those containing optical devices, building materials such as glass, and even high-value food and fisheries products including Halal would find the Philippines a prime spot for their facilities.

“Why do investors appreciate investments in the Philippines? It’s because they have less linguistics communication problem, it’s easier to hire local staff, there’s high quality of employees, higher employee retention rate... and also because we have the slowest wage increase in the region,” Manalo said.

Moreover, he stressed there are tax holidays, special tax rates, and even exclusion in imports fees that may be awarded to foreign firms located in the Philippines.

The Aquino administration has long been promoting the expansion of the domestic manufacturing sector to create more jobs and in turn, curb poverty incidence in the country.

Latest data showed factory output, as measured by the volume of production index, contracted 0.5 percent in July due to the decline in the manufacture of basic metals, wood and wood products, food, beverages, furniture and fixtures, and machinery except electrical.

Socioeconomic Planning Secretary Arsenio Balisacan, however, remained optimistic earlier this month as he expects the holiday season to boost production and sales. The soft oil prices should also help the manufacturing sector cut costs and increase its profits, he added.

The 12th China-Asean Expo and the 12th China-Asean Business and Investment Summit which opened last Friday here in Nanning City, Guangxi, should be a big opportunity for the Philippines to attract more foreign firms.

“I have spoken to my counterparts, the vice ministers in different Asean countries, and we’re looking at a lot of trade agreements that we’re trying to work out,” Manalo said.

“We’re trying to see how we can work and advance (the Asean trade agreements) and there are also a lot of talks, bilateral and multilateral ones,” he continued.