Philippines among most vulnerable to shifting MNC operations

MANILA, Philippines —  The Philippines is among the most vulnerable to the shifting operations of multinational corporations as it is a small player in the world market and challenges persist in keeping the competitiveness of some  businesses in the country, the Department of Trade and Industry (DTI) said.

“We are a small player, a small country compared to the global world demand. So you can expect a lot of this rationalization when global headquarters look at their resources,” Trade Secretary Ramon Lopez told reporters.

He said the company’s strong presence in a country shows how important that market is for the firm.

Lopez made the comment following recent announcements made by multinational firms they are downsizing operations in the country.

Last January, it was reported that Finnish company Nokia is closing down its research and development office in Quezon City, a move which would affect 700 workers, to consolidate operations in fewer locations.

Earlier this month, it was also reported US-based bank Wells Fargo & Co. would be laying off 700 of its 750 technology employees as part of a global strategy of co-location and collaboration. Some of the jobs in Manila would be moved to India.

Just last weekend, Honda Cars Philippines Inc. said it is shutting down its assembly plant for City and BR-V vehicles in Sta.Rosa, Laguna as it seeks to optimize resources in production operations. The plant’s closure will affect 387 workers.

When asked if more global firms are seen to rationalize operations in the country, Lopez said it would depend on the business the company is engaged in.

He said firms downsizing operations in the country are those facing challenges in staying competitive in the Philippines.

“They may not be competitive in the Philippines, but it has something to do with the competitiveness structure of their industry,” he said.

In the case of Honda, he said while the car business is not a growing segment for the company, the motorcycle business is a different story as the firm is currently the country’s biggest manufacturer of motorcycles.

“In reality, that is the strong business they have here. So, the business they have which is a good match for the Philippines, they will keep. That’s I guess a business decision globally. When the overall economy becomes better, then you can see they will look at expansion, diversifying their production sources,” he said.