The Philippine Economic Zone Authority (Peza) is targeting more South Korean firms to set up shop in the country’s ecozones, with more investments in the manufacturing and electric vehicle industry expected following the signing of a bilateral trade deal in November.
Aleem Guiapal, officer in charge and deputy director general for finance and administration of Peza, told the Inquirer on Monday they were optimistic that more South Korean firms would register with them before the end of 2022.
“We have 251 locators already and our target for the year is to increase this by 6 to 7 percent,” the Peza official said in an interview, saying they had a meeting with South Korean businesses last Oct. 19.
“The interest of [South] Korean investors specifically in the manufacturing and the electric vehicle sector, is very high,” he added.
According to Guiapal, cumulative investments from South Korean firms since 1995 up to June 2022 totaled P89.864 billion, with the value of exported goods reaching $1.1 billion.
“[South] Korea is No. 7 among exporters registered under Peza,” the official said.
A total of 44,359 jobs have also been generated because of these investments, according to the Guiapal.
“Our target for the year is to increase this by at least 6 to 7 percent,” he said, referring to the number of additional jobs they were hoping to create.
Top Korean firms operating under Peza include Samsung Electro-mechanics Philippines Corporation, Smart Electronics Manufacturing Service Philippines, Inc., Prima Tech Philippines Inc., Kodec Precision Inc., Donggwang Clark Corporation, IM Digital Phil Inc., Phil BXT Corp., Littelfuse Phils Inc., Hysonic Philippines Inc., and Daeduck Philippines Inc.
“Samsung is currently looking to expand more. They are already one of our locators in Calamba, Laguna, but they want to expand further,” the Peza official said, but explained that they can’t disclose more details since it is still under discussion.
Meanwhile, the top Korean industries in the Philippines are: radio, television, and communication equipment; fabricated metal products; rubber and plastic products; real estate activities; and wearing apparel
Earlier this month, the Department of Trade and Industry (DTI) said plans were underway to have a free trade agreement (FTA) with South Korea signed in November.
Trade Undersecretary Ceferino Rodolfo said that both parties were done with the legal scrubbing and nearing the finalization of an FTA that would benefit local banana and processed pineapple exporters in the form of reduced tariffs.
The same FTA is estimated to bring in between ₱150 billion and ₱200 billion in investments in three years, particularly in the electric vehicle value chain and agricultural processing.
The Philippines’ priority interest in the bilateral trade deal is the exportation of banana and processed pineapple to South Korea, which are currently levied a 30-percent tariff, Rodolfo said.
“That is very critical for us in terms of trade value because that is big. We are also competitively disadvantaged vis-à-vis Vietnam,” said Rodolfo in a recent interview with reporters.
The trade official said Vietnam had signed an FTA with South Korea in 2015, which reduced and would eventually set the two-way tariffs for the tropical fruit to zero.
“Within five years, the 30 percent tariff would be declining until it reaches zero on the fifth year,” Rodolfo said, explaining Vietnam’s trade advantage over the Philippines.
The trade official added that the Philippines is also looking at directly supplying South Korea with nickel ore, considering that the latter still imports nickel battery precursor materials from China.
With the Philippines supplying more than 60 percent of China’s nickel imports, he said that they are finding ways on how the country could directly supply South Korea,
“We can further collaborate because there is a clear synergy,” he said.