The Wenzhou Chamber of Commerce of Fengxian, a non-profit community organization initiated by Wenzhou entrepreneurs in Fengxian District, Shanghai, China, was recently in the country to get an overview of the Philippine investment environment and discuss possible business partnership opportunities with local companies.
Executives and representatives of business enterprises engaged in wire and cable, transformer, power transmission and distribution, intelligence equipments, textile, finance, real estate and other fields in the manufacturing industry comprised the business delegation to the Philippines.
The delegation is particularly looking into business opportunities in the energy sector to meet the expansion demand of its member enterprises. They are also considering investing and setting up factories in Asia with emphasis on the Philippines given its geographical advantages, lower labor cost, encouraging developments, as well as renewed bilateral relations with China.
Officials of the Philippine Board of Investments (BOI) led by Trade Undersecretary for Industry Development and BOI Managing Head Ceferino Rodolfo briefed the business delegation on Philippine investment opportunities recently (June 25, 2017), emphasizing that the country remains an investment destination of choice being the fastest major growing economy in Asia with the highest 2016 gross domestic product (GDP) of 6.8 percent.
|Trade Undersecretary for Industry Development and BOI Managing Head Ceferino S. Rodolfo (seated, middle) and BOI Director for International Investments Promotion Service Angelica M. Cayas (seated, second from left) with the business delegation from the Wenzhou Chamber of Commerce of Fengxian.|
Undersecretary Rodolfo also boasts of the impressive growth of the Philippine manufacturing sector in the first semester of the year, adding that he remains confident this pace will continue and that the country will outperform its Southeast Asian neighbors given the rosy business conditions in the country coupled with sound economic fundamentals and industrial policies and programs.
The Nikkei ASEAN Manufacturing Purchasing Mangers’ Index (PMI) in its latest reading reported a 53.3 PMI reading of the country’s manufacturing sector for May 2017, up from 53.3 in April and the highest for the year, indicating “another strong upturn for the sector”. The Philippines’ PMI is better compared to its neighbor countries namely Myanmar which registered a PMI reading of only 52 in May, Vietnam with 51.6, Indonesia with 50.6, Thailand with 49.7, Malaysia with 48.7, and Singapore with 48.7. A reading above 50 indicates improving business conditions and expansion while a reading below 50 indicates the opposite.
IHS Markit, which compiled data for the index, said there was robust growth in both output and new orders alongside higher employment and buying levels among Philippine manufacturers. “Strong client demand and business optimism also prompted firms to build inventories at a faster rate,” the report indicated.
The BOI is forecasting a robust manufacturing sector with more high-impact, labor intensive, and socially-relevant manufacturing investment projects coming in. “With the swift approval of the 2017 Investments Priorities Plan (IPP) which was designed to spread the benefits of the country’s fast economic growth to the countryside with emphasis on a broader segment of the manufacturing sector, innovation-driven, and job-generating businesses, we see a robust growth of manufacturing investment projects this year,” said Undersecretary Rodolfo.
The manufacturing sector generated a total of PhP49 Billion investments in 2016 or 11 percent of total investments last year. In the first four months of 2017, the sector recorded a 158 percent growth with investment projects amounting to PhP15.425 Billion from only PhP5.96 Billion recorded in the same period last year. Investments in the sector are expected to generate at least 3,038 in new jobs once these business projects are operational.
Manufacturing, alongside trade and services, continue to lead the growth of the country’s GDP which grew 6.4 percent in the first quarter of 2017. Manufacturing dominated the growth industry which grew by 6.1 percent in the first quarter of 2017. Industry, which shared 34.2 percent to the GDP for the quarter, contributed 2.1 percentage points to the 6.4 percent GDP growth. Of the 6.1 percent growth in industry, manufacturing contributed 5.4 percent during the quarter.
China remains as a vital business partner for the country with significant contributions to the country’s economic growth. In 2016, China placed 14th in the list of top foreign investing countries in the Philippines, pouring in Php1.52 Billion worth of investments, data from the Philippine Statistics Authority showed.