In 2012 Phl manufacturing sector shows signs of recovery

CEBU, Philippines - The year 2012 is considered as a historical year for the Philippine manufacturing sector, as multinational companies (MNCs) started to make their comeback in the country as well as new firms came in.

“Prior to 2012 we thought manufacturing was dead [for the Philippines]. But, at the start of this year, dozens of inquiries in Cebu alone entered,” said Cebu Investments and Promotions Center (CIPC) managing director Joel Mari S. Yu.

One big thing that happened this year is the opening of Knowles Electronics (Philippines) Corporation at the Cebu Light Industrial Park (CLIP), an American micro-acoustic and human interface product maker, which will hire an estimate of four thousand people in the span of two years.

According to Yu, the entry of Knowles to Cebu is just the start of the “resurrection” of the manufacturing sector in the Philippines, specifically here. More MNCs in the light engineering or those that do electronics and electrical assembly are coming in the next couple of years.

In fact, CIPC alone entertained over a dozen of inquiries for investments in 2012. If these companies will decide to open their respective facilities here, it would mean thousands of jobs will be created.

However, amid this positive development, Cebu was caught unprepared as shortage of available space inside economic zones has been noted.

“We have to build up new areas to accommodate more manufacturing companies in Cebu,” Yu said.

Both Mactan Economic Zone I and II are almost full, while the CLIP is currently flooded with inquiries for new locators.

CLIP president Rommel M. Leuterio said in an interview that the company that operates the CLIP, the Science Park of the Philippines Inc., already turned down a total of 60-hectare opportunity for investment because of lack of available inventory.

The Science Park of the Philippines Inc., manages different economic zones in the Philippines, mostly in Luzon.

In Cebu, CLIP has now a total of 17 locators including the recently announced opening of Knowles Electronics (Philippines) Corporation. Now, the Park has total of 2,300 employees excluding the upcoming 4,000 more workers that will be hired by Knowles starting next year.

“We are expecting a Canadian company which is into waste water engineering business, a Japanese firm that manufactures medical products, and two more foreign manufacturing companies that are expected to locate in the zone,” said Leuterio.

Now, the CLIP is down to eight-hectare available for lease to potential locators, Leuterio said.

According to Leuterio the recovery of the Philippine manufacturing sector is profound now, prompting the company to expand the land area of the ecozone, “we are looking at getting more land contiguous to the Park.”

Inquiries are increasing to look for economic zone locations in the Philippines. Leuterio said aside from Canadian, American, and Japanese companies, there are also inquiries from big manufacturing firms from Taiwan, and even China.

In fact, the Science Park of the Philippines Inc., is putting up another economic zone facility at the Calabar Zone.

The revival of interest from the foreign direct investors in the manufacturing sector is attributed to the improved image of the Philippines to the world’s investment community, with the good economic performance of the country.

Leuterio said the Pnoy administration’s bid to minimize corruption is the number one “come on” that lure manufacturing companies to locate or re-locate in the Philippines at this time.

Besides, he said that problem of economy in Japan, Thailand’s flood calamity issue, and Vietnam’s high inflation also made the Philippine much more attractive to manufacturing investors “once again.”

Earlier, economists urged the Philippines, specifically Cebu to re-activate its bid in attracting the world’s manufacturing sector.

University of Asia & the Pacific economic professor, Bernardo Villegas said that Cebu’s strength in services, will not only serve the BPO market, but largely also the manufacturing sector.

“You have to go back in attracting the manufacturing related investments again,” Villegas told Cebuano business community during the recent economic briefing.

Villegas believes that there is a need to restore the manufacturing strength of the Philippines, while China is having labor problems right, and some manufacturing firms are looking at other investment sites for relocation, or expansion.

These economic experts believe that the Philippines should seriously consider in attracting the manufacturing investments, in order to solve its unemployment problem, and balance the job opportunity distribution that will include the grassroots.

Asian Development Bank (ADB) senior country economist Norio Usui, likewise believes that the Philippines has a huge opportunity to re-capture the manufacturing related investments in the world.

Usui said that the reason why most Filipinos do not feel the good economic state in the country, although supported by real figures, it’s because it is currently walking on “one leg,” which means that opportunities are only available to some segments, but the majority do not get the same opportunity of employment, due to its weak development in the manufacturing sector.

In BPO or tourism sectors, only the college graduates, or those that have good education background will be able to get the employment opportunities, but the other on the side of the spectrum, those that used to get employment in the manufacturing and agriculture slowly losing livelihood, or job opportunities.

Usui dismissed impressions that the Philippines is losing its manufacturing attractiveness to other countries like China, and Thailand, saying the country still has the competitive edge because of its people, however, the government must fix its policies in attracting the manufacturing investors.

If the Philippines, will be able to tap the wealth in manufacturing sector, more and more Filipinos will be able to get employment, thereby spreading its economic vitality even to the undergraduates down the farmer or fisherfolk level.

According to Usui, the Philippines’ competitive advantage is in attracting the high value manufacturing sector. In fact, it is still ahead with other countries like Indonesia, and Vietnam.

What is missing though, he said is the proper implementation of policies in manufacturing sector, specifically in luring the high value investments in this industry. (FREEMAN)