PH looms as alternate Asia trade hub

The Philippines is well poised to serve as an alternative site to China for foreign companies seeking to set up a manufacturing or services base from which they can re-export to Asia and the rest of the world, according to the Hong Kong-headquartered Dezan Shira and Associates.

In an article titled “The Cost of Business in the Philippines Compared With China,” Dezan Shira founding partner and chair Chris Devonshire-Ellis noted that the Philippines holds a number of advantages compared to China, including having more competitive (or lower) operational costs.

Add to that is the Philippines’ membership in the Asean and its strong trade links with the United States “especially make the Philippines very much a China alternative,” he added.

“Light manufacturing and a booming service industry, especially in business process outsourcing, and a burgeoning Asian tourist industry make the country well worth considering when it comes to looking for an Asian base from which to re-export to China, Asean and internationally,” Devonshire-Ellis explained.

Devonshire-Ellis’ article, which formed part of a series comparing Asean nation business costs with China, also noted that another plus was that English was spoken across the lower and middle classes of the Philippines, especially in the larger cities and tourist spots. This enabled the country to attract a great deal of business process outsourcing (BPO) on a global scale.

“Its competition with China for investment is also having an impact. Light manufacturing and some aspects of the services industry have long viewed the Philippines as a superior destination for business than China. Its ability to offer a Western-friendly business environment, a burgeoning IT and electrical products skill set and increasingly improved infrastructure means the Philippines is a viable alternative to manufacturing and services to China,” he added.

Devonshire-Ellis further pointed out that the Philippines enjoys good trade relations with China, Japan, the United States, Hong Kong, South Korea, Singapore and the rest of the Asean.