Reflections on PH’s industrial decline
When I graduated from the University of the Philippines as an engineer in 1970, the Philippines was on the verge of industrialization. Till the 1960s, we were widely regarded as Asia’s second most advanced country after Japan. Among my peers, there was little doubt we would soon join the ranks of developed nations.
More than half a century later, the Philippines is still waiting.
This is not nostalgia. It is a conclusion drawn from lived experience, five decades in industry, and a history we too often choose to forget.
My first job was with Stanford Associates Inc., a pioneer of Philippine manufacturing. Stanford was the first semiconductor company in Southeast Asia, producing and exporting electronic components when most of the region had no such capability. Filipino engineers met international standards long before “high-tech” became a buzzword. At its peak, Stanford and its affiliates employed over 7,000 people.
Yet despite its first mover advantage, Stanford did not survive.
It failed not for lack of talent, but because industrial fundamentals steadily turned against manufacturing. Power became expensive and unreliable. Export support was weak. Supplier ecosystems never fully formed. Above all, industrial policy lacked focus. As Taiwan, Singapore, and Malaysia relentlessly strengthened infrastructure and export discipline, the Philippines stood still. Unable to move up the value chair, the company eventually closed—taking with it not just jobs, but accumulated skills and technological learning.
In the 1970s, the Philippines was a regional hub for multinationals. Appliances, electronics, motors, and metal parts were made here. Foreign firms came not merely for labor, but for capability.
I visited Thailand in 1973. Bangkok’s international airport was then noticeably smaller than the Manila International Airport. Few would have predicted that within a generation, Thailand would become a leading manufacturing hub—while the Philippines steadily deindustrialized.
In 1984 when I visited China, there were no skyscrapers, no luxury cars, no limousines—only bicycles. Manufacturing was basic, and China was just beginning to open itself to the world. Today, it is one of the world’s most formidable industrial powers.
While visiting South Korea in 1994, senior executives from major steel, shipbuilding, and petrochemical companies told me something unexpected. After the Korean War, they and many of their engineers and managers had trained in the Philippines.
The usual explanations—corruption, politics, missed opportunities—are real but incomplete. What we truly lost was industrial momentum. Manufacturing depends on ecosystems: reliable power, skilled workers, supplier networks, export discipline, and policy continuity over decades. We once had these. But we failed to protect them. As factories closed, skills atrophied and investment declined.
The tragedy is not that we tried and failed. It is that we stopped trying.
There are exceptions. At Armscor, where I served as executive vice president and director for over a decade, sustained investment in production capability and export orientation turned a Philippine firm into the world’s largest producer of M-1911 pattern pistols. It succeeded not because conditions were ideal, but because manufacturing fundamentals were given utmost importance.
These lessons matter today. Deglobalization is now a reality. The pandemic exposed the fragility of long supply chains, while United States President Donald Trump’s tariff war undermined faith in stable trade rules. Companies are now prioritizing resilience, shorter supply chains, and politically reliable locations. This shift creates opportunity—but only for countries prepared to manufacture.
Labor sent abroad earns remittances. Labor harnessed at home builds factories, skills, and national resilience.
We missed the 1970s. We half-missed the 1990s. The current global supply chain restructuring may be our last chance to become a producer rather than a perpetual consumer.
Manufacturing will not return through rhetoric. Government must treat infrastructure—especially power—as industrial backbone. The private sector must accept exports as discipline, not aspiration. Education must align skills with production realities. Above all, policy must be consistent enough for factories to survive political cycles.
We have already lost half a century. Another decade of business as usual will lock in dependence and erase the remnants of our industrial capability. History shows such windows do not reopen easily.
If we do not act now, there may be no third chance.
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Pete Maniego is an industrial engineer, lawyer, and former industry executive. He was a faculty member at the University of the Philippines College of Engineering and Ateneo School of Government, and previously chaired the National Renewable Energy Board, Institute of Corporate Directors, UP Engineering Research & Development Foundation, and Energy Lawyers Association of the Philippines.
