The Philippines aims to corner more Chinese investments to advance trade and investment relations between the two countries, according to Trade and Industry Secretary Gregory Domingo.
“About $3 billion in investments from Philippine companies are going to China but only about $1 billion is going from China to the Philippines, Domingo said in a briefing on the ease of doing business in the Philippines.
Domingo said the Philippines was considered the “best value-for-money” investment destination at this time compared to China and other manufacturing hubs in Asia.
“Our labor costs used to be higher than China but now it’s the reverse since theirs has shot up. Including all the improvements we’ve been making, we are the best destination for investors now,” he said.
The trade chief said he had made several visits to China and was set to return there to push for a “more balanced” bilateral trade regime. This, despite recent geopolitical tensions between the two countries due to a territorial dispute over the West Philippine Sea.
China, which has been rebalancing its economy from a production-centered one to become more consumption-driven, is expected to look overseas for growth opportunities for its homegrown businesses as labor and other costs increase.
Investors such as vehicle importers and distributors said that, encouraged by lower costs, competitive labor and robust domestic demand, the BPO industry was set to hit another year of double digit growth alongside the manufacturing sector.
The manufacturing industry is seen expanding with the influx of Japanese and Korean firms into the country.
The Philippines is attracting investors not only due to its expanding economy but also because it has high quality labor at lower cost and more stable growth compared to China or Vietnam, analysts said. They also said that while Thailand had been a traditional choice for manufacturing expansion, the flooding that hit its supply chains prompted companies to seek alternatives.