Twelve Korean companies have begun conducting due diligence in the Philippines to assess the viability of setting up manufacturing facilities and factories for semiconductor and electronics, as well as for food processing.
These companies, which participated in an investment and market research mission to the Philippines last week, are reported to be upbeat about their prospects in the country, which is being positioned as a gateway to the Asean (Association of Southeast Asian Nations) bloc.
The Korean companies “came here to look at the business opportunities. They are doing market research to [possibly] set up factories,” said Trade Undersecretary Nora K. Terrado.
The companies, she said, are doing mostly due diligence, business matching, and “investigating if what they hear about the Philippines is true.”
Terrado pointed out that the Korean firms, whom she declined to identify due to a nondisclosure agreement, are interested in doing business in the Philippines primarily because of the country’s improving business climate. Another factor that has contributed to this growing interest is the testimony of Korean firms who have enjoyed success here.
“They want to investigate the experience of successful Korean companies here. They are mostly looking at economic zones [managed by the Philippine Economic Zone Authority],” she said.
The trade official noted that none of the 12 Korean firms had even brought up the current problems on port congestion, which could make a dent on the country’s growth, as well as on the export and import receipts this year.
What was brought up, according to Terrado, was the occurence of typhoons.
For now, the Korean firms are still studying, apart from the potential sites, the kinds of business models they can use when they set up shop in the country. The important thing, however, is that the Philippines is able to position itself as a potential hub for Korean companies in the Asean.
This is still a very early stage, Terrado said. “That’s why it’s very important to show them the country well because the Philippines is being considered a gateway [to the region]. Any Asean country can be a candidate [as a hub], so we have to do a good job in giving them a good value proposition.”