CIFIT 2021 KEY SECTORS
Our country is a growing economy and market. With our growing middle class; and, large, young and skilled workforce, this makes our country one of the most dynamic economies in East Asia. The importance of reliable and sustainable industries makes our country priority these sectors
SUSTAINABILITY
Our country supports the global wave of emphasizing sustainability by prioritizing the needs of the present and the needs of the future by supporting environmental, social and governance related insights in these key industries:
Our country’s logistics and warehousing industry also remained steadfast amid the pandemic as merchants further tap the steadily growing e-commerce market. In fact, substantial foreign investments approved in 2020 were for transportation and storage. Logistics and warehousing sector likewise expects high demand in 2021-2022.
The Philippines offers a potential market for hyperscaler companies and as a hub to neighboring countries such as China, given its thriving digital and economic profiles. Our country’s 110 Million population (2nd in SEA) offers a very promising business market to foreign investors primarily due to the population’s cultural affinity having the propensity to access foreign/western content and main consumers of cloud services are local enterprises. The Philippines presents a robust infrastructure that are designed to enhance and sustain business operations, being among the first country to adopt 5G network; with presence of 16 international sub-sea cable systems, 13 cable landing stations and 600K km domestic fiber optic cable roll-out. For RE, the Philippines has a vast RE resources with 7,599 MW installed capacities and 807,860MW estimated potential capacities available for development. Our labor force stands at around 45 million and we produce almost 800,000 graduates annually across a wide range of disciplines including engineering and technology. Our government also provides support to sustain and protect hyperscaler and data center activities thru enhancing its focus on pro-active measures for talent development to accelerate the growth of innovations-led and technology intensive industries; and thru implementation of relevant policies such protection of Intellectual Propery rights and data protection, among others.
Our growing start-up ecosystem, with fintech and e-commerce as our sub-sector strengths, ranks well in terms of value-for-money and affordable talent. With fintech and e-commerce growing ever stronger in the Philippines and Asia, we are poised to develop an advanced tech start-up environment. China and the Philippines could explore partnerships and opportunities during this “new normal” where technology and innovation play a very crucial role, especially with our country’s pursuit of an Inclusive, Innovation-driven Industrialization (i3s). The PH houses a young, proficient, and thriving ecosystem that needs funding to grow and expand. Meanwhile, the government has been providing strong support to the industry through the Philippine Innovation Act and the Innovative Startup Act wherein barriers are removed in doing business as well as funding and other forms of support are given to startup, micro, small and medium enterprises. The Revised Corporation Code allowing the incorporation of one person corporations also shows the government’s support in promoting entrepreneurship.
Our country has competitive advantages in the clean and renewable energy sources like geothermal, hydro, wind, biomass and solar energy. Renewable energy have saved our country PHP4.04 billion, according to the Philippine Electricity Market Corporation. There is still a lot of possibilities for continuous shift to renewable energy to help curb the continuous use of imported fuel.
Prospective investments from RE are expected to come from the 25 candidate RE zones (CREZ10) with highest concentrations of high-quality wind and solar resources combined with demonstrated interest from project developers. The CREZ involves a proactive transmission planning approach, which aims to connect CREZ to the power system. Thus, these zones open the opportunities for private sector development and reduce investment barriers by directing transmission development and RE developers to the country’s most promising RE opportunities.
The 25 selected CREZs across the Philippines have an estimated gross capacity of 152 GW of wind and solar photovoltaics (PVs) potentials. The zones also include an estimated 365 MW of geothermal, 375 MW of biomass, and over 650 GW of hydropower capacity distributed across the Luzon, Visayas and Mindanao systems. The gross RE resources represent an upper bound assessment for each zone.
The IT-BPM sector is the biggest job generator in the Philippines contributing 1.23 million direct jobs and 4.08 million indirect jobs. We have an excellent global track record with a 13% global market share in the global IT-BPM industry. IBPAP reports that the industry has the potential to grow by a CAGR of 5.5% in revenue and 5.0% in headcount from 2020 to 2022. This means that the industry can achieve revenues of US$29 Billion and add more than 130,000 jobs by 2022. The PH may serve as complementary service provider to China in the areas of IT technology, applications and services. Likewise, Chinese companies may explore investment opportunities in animation, contact center, game development, global shared services, healthcare as well as IT and software activities.
RELIABILITY
Our country recognizes the importance of certainty when a foreigner invests so it will always support and enhance the best practices in these key industries:
We are blessed with rich and diverse agricultural resources. We offer a variety of fresh fruits and vegetables, high value live marine products, coconut, and other healthy and natural food and beverages. China remains our key partner in this sector, and we are always on the lookout for partners and investors that can also aid us in the production and value-adding activities of the sector, such as agricultural technology, logistics, and marketing.
Our countries proximity to China enables us to deliver high quality fresh agricultural products quickly.
Our government through its Build, Build, Build program allocated USD91.4 Billion to fund 142 infrastructure projects. We are projected to increase our budget and business efforts further in the next few years. We keep you and potential partners in mind as we improve our road networks and infrastructure. We aim to connect more cultures, businesses, and markets within the Philippines and with our foreign trading partners.
Our government has been developing more innovative foreign investment solutions to make doing business with us easier. We resonate with China’s “Belt and Road Initiative” and are one with you as we enhance connectivity within and among partner nations to move toward a brighter future.
On the other hand, our dependable construction companies with its strong labor force are open to partnering with Chinese and foreign companies in projects located in the Philippines and other foreign markets.
Our strong linkages in the global supply chain make the Philippines an ideal complementary location for manufacturing activities, especially in electronics, automotive, aerospace, medical devices, appliances, bicycles, among others. The existence in our country of supporting industries to manufacturing provides ease and efficiency in this sector.
We are your ideal gateway within the ASEAN, being strategically located in the region and offering preferential trade arrangements through our bilateral and regional free trade agreements (FTA) to the rest of key Asian countries (Japan, Korea, India, Australia, New Zealand) and through the Generalized Scheme of Preferences (GSPs) with the US, EU, Canada, and Russia.
Introduces government programs that target e-vehicle adoption for 21% of the country’s vehicle population by 2030 following the move towards electrification in line with the global automotive trend.
Backed by strong allied and support industries including auto-electronics, die and mold, metal casting, plastics industries, and IT-BPM that sufficiently support automotive manufacturing activities.
Provides full support to the industry through facilitation of development programs, capacity building activities and active industry promotion and collaboration.
Remains to be the top contributor to the country’s economy.
Characteristically export-oriented, accounting for about 61% of the country’s total exports US$43 billion in 2020.
3rd largest contributor to manufacturing Gross Value Added (GVA) accounting for 10.7% of the total manufacturing GVA.
Presents Investment opportunities in the areas of Semiconductor Manufacturing Services (SMS); Electronic Manufacturing Services (EMS), and Design and Development Services.
Backed by the presence of a supply chain for manufacturing such as tool and die, chemicals, semiconductors, plastics and metal parts necessary in the production of medical devices and its parts.
Have industries and existing facilities like the Electronics Product Development Center and Advanced Device and Materials Testing Laboratory to support manufacturing, product design and research and development.
Expected to be driven by the government’s initiative to upgrade and build more healthcare facilities to support the demand.
One of the fastest-growing in the Asia-Pacific region exporting US$780M-worth of value of aerospace parts and components in 2019.
Major international carriers are choosing to have their fleets serviced in the country catering to this rising demand.
Infrastructure developments such as the development of local airports provide opportunities for the country to further expand its MRO capacities and are seen to contribute to the long-term growth of the country’s aviation industry.
Established and dependable tier 1 and 2 suppliers to the world’s largest aerospace manufacturers are already operating and growing here.
The demand for steel fueled by various government programs presents another opportunity for foreign investments as they are used extensively in manufacturing machinery, vehicles, construction and power generation making this rich in potential.
The only country in ASEAN that has no Integrated Steel Mill (ISM). With growing demand for steel products, the establishment of an ISM would complete the value chain of the industry.
With an annual population growth rate of 1.4% there is continuous need for residential housing units. In fact, in the first (1st quarter) of 2021, real estate and ownership dwelling contributed to our country’s USD5.4 Billion gross value added. Our country boasts a unique and diverse geography so foreign investors may choose to migrate and retire in the Philippines. There is a wide market opportunity whether residential, commercial, and industrial.
According to the Housing Industry Roadmap commissioned by one of the leading housing developers’ association in the Philippines, our country’s housing backlog is expected to reach 12.4 million housing units by 2030. 7.7 million units of which belongs to the affordable housing segment while 78,705 units and 11,767 units of mid-cost and high-end housing, respectively.
In terms of accommodation facilities, there is a need for additional 88,965 accommodation rooms by 2022. There is also a wide market opportunity for the establishment of retirement facilities, given the 9.6 million elderly people (over the age of 60) in the Philippines by 2030.
As to commercial building space, our local office market continued registering new demand in the first quarter of 2021 and is growing despite the pandemic as more firms and investors are being optimistic on a post-covid 19 economic recovery.
