Global firms expand facilities in RP industrial parks

The competitive advantage of the Philippines as a Southeast Asian manufacturing hub is once again being highlighted among particular global market as China’s attractions dim in the wake of the SARS crisis.

According to data from the Philippine Economic Zone Authority (PEZA) which supervises privately-owned industrial parks in the country, economy zone exports grew by 9.27 percent to P5.6 billion in the first quarter of 2003 as against the 2002 figure covering the same period.

PEZA Director General Lilia de Lima observes that many global manufacturing concerns in the country expanded their operations in the recent past–"with expansions definitely outnumbering departures."

Along with other industry observers, De Lima surmised that the attractions of industrial parks in the Philippines were most likely enhanced in the past year by the decline in popularity of China following its handling of the SARS threat.

The observation is further supported by a 19.65 pecent growth in economic employment which registered at 839,785 in the first quarter of 2003 in comparison to the first quarter figure of 2002, according to PEZA figures. According to De Lima, Filipino workers have consistently been cited as a distinct advantage of the Philippines given their ability to speak English and learn new technology in less weeks than the average period.

Ma. Victoria Anonuevo, president of Laguna Technopark Inc. (LTI) in Sta. Rosa, Laguna, which hosts Honda, Henkel and other global names, disclosed that despite general declines in economic zone investments in 2001 and 2002, the company continues to sell lots and lease standard LTI factory sites to global manufacturers. "We are seeing increased activity in this sector and continue to entertain inquiries from local and foreign manufacturers. LTI has in fact opened a new phase with lots ranging from 6,170 sqms. to 8,335 sqms.," she added.

More significantly, Anonuevo disclosed that in 2003, large electronic companies, among other firms, garnered approvals from PEZA for expansion plans in LTI that totaled P272 million as of end-May. In 2002, she said the expansion projects of LTI locators amounted to P2.5 billion with Honda Parts Manufacturing Company being the most visible.

Lyle Abadia, head of operations of LTI, explained that large companies such as Matsushita, Toshiba, and Isuzu – all of which have manufacturing plants there – tended to attract their subcontractors to the same location. "It is simply more convenient for a supplier of say, Panasonic, to be within the same industrial park. It means less travel time and lower costs," Abadia noted.