PH’s untapped manufacturing advantage

The Philippines has something every manufacturer wants: a large and growing market. With more than 110 million consumers, a young and educated workforce, widespread English proficiency, and strong relationships with major global economies, the country has many ingredients needed to become a stronger manufacturing economy.

For decades, remittances, tourism, business process outsourcing, mining, and services have supported growth. The Philippines can now use its domestic market to build something more: industrial capability.

Every year, billions of dollars’ worth of electrical equipment, construction materials, machinery, appliances, renewable-energy equipment, household goods, and industrial components are imported.

Many will continue to be imported. That is normal for an open economy. But where domestic demand is substantial and sustainable, a simple question should be asked: Why import the finished product if it can be competitively manufactured in the Philippines?

What we learned in Batangas. Our experience has strengthened my confidence in Philippine manufacturing.

In September last year, we leased factory facilities in Sto. Tomas, Batangas. More than 600 40-foot containers of manufacturing equipment began arriving from overseas in December. After installation, commissioning, and workforce training, the factory began partial production in July.

Today, it produces advanced solar cells for export to the United States. The factory has already recruited more than 500 Filipino employees, many of them young university graduates, and we expect employment to reach approximately 900 local workers by year-end.

The Filipino workforce has impressed us. Young employees learn quickly and adapt well to advanced manufacturing, while local engineers show strong technical and problem-solving capabilities. The Philippines need not compete only on low labor costs; its greater advantage can be the quality and adaptability of its people.

A P2,000 meter that could cost P1,000. Local manufacturing can also benefit Filipino consumers directly.

Consider a conventional electricity meter. A meter that may cost roughly P400 in the Chinese market can cost around P2,000 in the Philippines, depending on specifications, certification, and procurement.

Suppose components are initially imported while assembly, testing, and quality control are performed locally, bringing total production cost to approximately P500. If the meter can be sold for P1,000, consumers could potentially save around P1,000 while the manufacturer retains sufficient margin to build a viable business.

More importantly, part of that P500 would pay Filipino salaries, local logistics, factory expenses, testing, packaging, and eventually locally sourced components. This is how a consumer market gradually becomes an industrial ecosystem.

The objective is not to manufacture everything locally, but products where demand, economics, skills, and technology make Philippine production competitive.

Assembly is a starting point. Industrial capability develops gradually. A new factory may initially import most machinery and components. That is not a failure of localization; it can be the first stage.

Over time, more Filipino engineers can be trained, more components sourced domestically, local suppliers developed, and manufacturing advanced from assembly toward engineering, product development, research, and innovation.

The goal should not simply be a “Made in the Philippines” label. It should be more value made in the Philippines.

As global supply chains are reshaped by tariffs, trade tensions, and geopolitical changes, manufacturers are seeking diversified production locations. The Philippines can position itself not only as a large consumer market, but also as a trusted manufacturing platform serving global markets.

Turn purchasing power into industrial power. Government need not build these factories. Its role is to enable investment through predictable approvals, reliable infrastructure, competitive power, appropriate incentives, technical education, industrial land, and financing.

Private investors must bring capital, technology, management, markets, and training. Filipino workers provide the human capability.

Success should not be measured only by how much foreign investment enters the country or how many factories are announced. A more meaningful question is: How much lasting industrial capability does each investment leave behind?

Our Batangas experience has given me confidence in the answer.

The Philippines already has the consumers. It already has the workers. And increasingly, it has the opportunity.

The next step is to turn the purchasing power of 110 million consumers into the industrial power of a manufacturing nation.

—————-

Samuel Yang is an Australian renewable energy entrepreneur and chair of GBF New Power Group Inc.