The Philippines is becoming the new preferred destination in Southeast Asia for expansion of companies with presence in China, Philippine Economic Zone Authority (PEZA) Director General Tereso Panga said.
Panga said in a social media post Monday that the appetite of Chinese and multinational companies eyeing to invest in the Philippines is increasing amid the current United States government’s tariff policy to impose 20 percent tariff on all imports from China.
“Under the current Trump 2.0 trade regime, the C+1 strategy seemingly has evolved into C+1+1 (or C + 2) with the Philippines now being considered as the new ‘plus one’ preferred destination in ASEAN by relocating companies from China,” Panga said.
He said Vietnam has been the first choice of companies with a footprint in China for expansion due to its proximity to the east Asian country.
Panga added that this was expressed by companies during the recent PEZA’s investment meetings in Xiamen, Chongqing, Shenzhen, and Dongguan, where the investment promotion agency presented investment opportunities in the Philippines to around 220 participants.
“The Aoxing group based in Dongguan, an OEM (original equipment manufacturer) for projector equipment, projector screen, and audio-visual products for global brands like HP, Epson, and Skyworth has chosen the Philippines for its redundant manufacturing facility intended for the US export market,” the PEZA chief said.
Another example is the investment of American-Irish firm TE Connectivity in the PEZA zone for a PHP1.7 billion electro-optical components and devices manufacturing facility that would create over 2,000 direct jobs in the Philippines.
TE Connectivity has 20 factories in China alone.
It is also eyeing to expand information technology and business processes management operations in the Philippines.
“A number of MNCs particularly in electronics, electric vehicle, and automotive sectors have already transferred part of their operations including some of their contract manufacturers to the Philippines,” Panga said.
“In PEZA, we continue to receive as well big ticket investments in the pipeline by new investors and global industry leaders out of China such as one of the largest producers of vitamins and dietary supplements, the biggest producer of solar cells/panels with the highest efficiency rating in the market, and one of the biggest manufacturers of TV monitors and projector screens,” he added.
PEZA has registered 118 mainland Chinese companies with investments of PHP28.7 billion and generated 16,327 jobs. On the other hand, there are 78 companies from Hong Kong and 84 from Taiwan that were registered with the investment promotion agency.
“With these recent developments, PEZA counts the Chinese investors (including those from Taiwan and Hong Kong) among our best bets for foreign direct investments attraction for this year and for succeeding years to come,” Panga said.
“We all have these favorable conditions that indeed can make the Philippines as the new ‘plus one’ destination for China-based manufacturers wanting to export to the US and European Union. Our strong affinity with the US and being the economy in ASEAN with the least trade deficit with the US are compelling factors and top of mind considerations for the Philippines by relocating companies from China vis-a-vis our ASEAN neighbors,” he added. (PNA)
