SAN FRANCISCO, CA, UNITED STATES, October 5, 2021 /EINPresswire.com/ – The Philippines has a long history in the semiconductor supply chain since the 1970s, supporting the semiconductor assembly, testing and packaging needs for companies like Texas and Intel. In the 1980s, Filipino companies built electronic circuit board assemblies for high-tech customers mainly from the United States and Japan. Today the Filipino semiconductor and electronics industries are major exporters of high-tech and top-quality products to global customers. Industries are the largest contributor to the country’s economy, accounting for 62% of total Philippine exports at $ 43 billion in 2020.
“We are very optimistic about a post-pandemic recovery as the fundamental structure and strength of our economic fundamentals remain intact. Despite the disruption caused by COVID19, the Central Bank of the Philippines reported a 37.8% increase in FDI in the country from January to May this year compared to the same period last year. The Philippines has also seen strong growth in manufacturing and services over the past 10 years. Manufacturing growth for the second quarter of 2021 is 22.3%, ”said Secretary of State for Commerce Rafaelita Aldaba during her keynote address at the online business dialogue“ Make it Happen in the Philippines: Asia Outsourcing Insights – Top Reasons to Start Your Electronics Manufacturing Outsourcing Business to relocate the Philippines ”on 09/24/2021.
In addition, Secretary of State Aldaba stressed that this resilience and success came from one of the Philippines’ key assets – its 45 million highly skilled, educated, dedicated and cost-effective workforce with little or no turnover. The young and dynamic population not only boosts domestic consumption and local demand, but also continues to use innovation as a driver of growth. In 2021, the Philippines ranked 51st out of 131 countries in the global innovation index.
The Philippines provides access to key markets through bilateral and regional free trade agreements with Japan, the European Free Trade Association, ASEAN and ASEAN’s FTA partners including China, Australia, New Zealand, India, South Korea and Japan. The Philippines are also beneficiaries of the Generalized System of Preferences, which represent tariff privileges over countries such as the US, Canada, the EU, the UK and Russia. The country is also accelerating talks with India, which is not currently a member of the Regional Comprehensive Economic Partnership (RCEP), to begin negotiations on a preferential trade agreement. This offers enormous opportunities to lay the foundation for expansion and diversification plans for American companies in the region. The Philippines are certainly the next complementary investment destination as they offer preferential trade deals with global strategic partners and are part of the support industries for global manufacturing.
The Philippines is home to around 500 semiconductor and electronics companies and is a successful hub for Semiconductor Manufacturing Services (SMS) and Electronics Manufacturing Services (SMS). It is also emerging as an emerging player in IC design with a growing base of competitive IC design companies. The pandemic also resulted in rapid development of the Philippine medical device industry.
“There is a trend towards automation in the industry, we are no longer just workers. Filipino companies have invested in a lot of automated equipment. For Ionics, our strategy is always to leverage the advanced manufacturing capabilities for electronics manufacturing. Ionics launched our Industry 4.0 strategy back in 2015, so that we focused on the automation as well as on connectivity and intelligence in the production line. We created a digital twin of the factory to ensure that we are always one step ahead when it comes to manufacturing technology, ”said Jay Chavez, Chief Operating Officer of Ionics-EMS, during his presentation.
As for product capability, Chavez mentioned that the Philippines produces a wide range of advanced products from different industries. With Ionics they produce medical devices such as products for telemedicine diagnostics; Dashboards, infotainment systems, security systems for motor vehicles; Dredging Equipment for 4G and Now Moving to 5G Equipment; Fiber optic wireless network equipment; Home automation products; and computer peripherals. In addition, they set up a data science department to implement data analysis and deep learning to detect anomalies in the production line and thus quickly identify the causes. Many companies in the Philippines are starting to join the Industry 4.0 trend.
The quality culture in manufacturing is also one of the top reasons companies should consider a manufacturing facility in the Philippines, Chavez added. The Philippines adopted this culture, learned and benefited from the presence of a large base of Japanese companies and customers. Most Filipino companies have multiple quality and management certifications that demonstrate the focus on quality.
Compliance with IP protection and the focus on environmental, social and governance are further advantages in manufacturing in the Philippines. It is worth noting that the Philippines is not on the USTR Special 301 watchlist.
The global supply chain scene has been badly affected by the Covid19 pandemic and manufacturing companies are looking for alternative locations. The Philippines is a viable alternative location as Filipino companies are very flexible in providing services to their customers, offering complete transparency and transparency throughout the supply chain, and seriously sticking to qualified sources.
There are other important advantages that companies in the Philippines should consider: English is widely spoken and the official language of business, which makes communication and good business conversations easier, especially when it is time sensitive and does not require interpreters or translators, reducing the overall cost of business activity. The Philippines has an advanced telecommunications and data communications infrastructure due to the large number of IT / Business Process Outsourcing sectors; robust logistics industry with global freight forwarders and courier services; Duty-free and “green lane” system for imports and exports in the economic zones.
To learn more about the top benefits of the Philippines, please visit the online replay of the webinar at https://www.youtube.com/watch?v=9kx9-ZwJMg0
The Board of Investments (BOI) and the Philippine Trade and Investment Centers (PTICs) in Silicon Valley, Los Angeles, Washington, DC and New York jointly organized the webinar.
MIHP Asia Outsourcing Insights – Top Reasons to Relocate Your Electronics Manufacturing Outsourcing Business to the Philippines on September 24, 2021