Central Luzon at the center of industrial revitalization
Central Luzon continues to attract high-value manufacturing investments, boding well for the region’s industrial revitalization. Aside from the Cavite-Laguna-Batangas (CALABA) corridor in Southern Luzon, property firms are also expanding their industrial footprint in Central Luzon.
Colliers believes that the region’s thriving industrial operations will positively impact residential demand, with more players launching upper mid-income and upscale projects. Some local players are banking on the potential demand from industrial locators and their expats, and are bringing in foreign hotel brands to build co-branded foreign residential towers.
At present, manufacturers of electric vehicle batteries, semiconductors, fiber cement, tires, and pharmaceutical products continue to locate and expand operations in New Clark City, Clark Freeport, and other industrial parks in Central Luzon. These operations are supported by the development of railways, airport expansion, and the corridor’s proximity to Manila air and sea ports.
Colliers believes that measures such as land lease term extensions, ease of tax payments, green lanes for strategic investments, and the Foreign Investments Act will further help prime the Philippines as an ideal manufacturing hub amid the United States-Canada-Mexico-China trade war. Property developers, manufacturing locators, and investment promotion agencies should work together to sustain the country’s industrial competitiveness—a vital step in attracting billions of foreign direct investments.
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Reforms, initiatives to entice foreign investors
In December 2024, the Senate and House of Representatives approved on the third and final reading a priority bill that seeks to extend the land lease limits for foreigners to 99 years from 75 years. We believe this proposed extension, complemented by more attractive fiscal and non-fiscal perks, should entice more manufacturers to invest in the Philippines.
We also see the enactment of laws such as the CREATE MORE Act enabling the Philippines to attract investments. The law lowers the corporate income tax to 20 percent from 25 percent for registered business enterprises (RBE), and offers more attractive incentives.
Scout for new industrial, warehouse options
The Philippine Economic Zone Authority (Peza) reported that the government has approved the establishment of 27 new economic zones (ecozones) since 2023 valued at P9.2 billion. These new ecozones cover information technology, electronics, and manufacturing industrial parks.
Private property firms have also launched new industrial parks that are expected to be completed in the next two to three years. Science Park of the Philippines Inc. (SPPI) will develop a 100-ha industrial park in New Clark City to cater to companies engaged in food production, textiles, automotive parts, electric vehicles, semiconductors, and data centers.
In our view, these should support the government’s push for industrialization and provide opportunities for industrial locators and manufacturers planning to expand in the Philippines. These investments are likely to have positive spillover impacts for the property market, helping boost office, residential, and hotel demand.
Labor upskilling to boost competitiveness
The Philippines—along with Costa Rica, Mexico, Panama, Indonesia, and Vietnam—will benefit from a US Department of State-backed program that will focus on developing the semiconductor workforce and attracting more investments into the sector.
The Department of Trade and Industry is eyeing to produce 128,000 engineers for the local semiconductor industry with support from the US under the CHIPS+ Act.
Colliers believes that improving the skill set of the labor force will be crucial in boosting the country’s attractiveness for more job-generating industrial investments.
What’s next for Central Luzon industrial space
Colliers sees Central Luzon attracting higher-value manufacturers in the medium to long term.
Steel and fiber manufacturers Promet Asia and SHERA are set to open new facilities at the TECO Industrial Park in Pampanga. GFRP Philippines, which manufactures glass fiber reinforced polymer, has also opened a new factory building in Sterling Industrial Park 3 in Bulacan.
Despite global economic and supply chain challenges, the industrial sector is poised for growth and we see Central Luzon cornering opportunities amid uncertainties.
For feedback, please email joey.bondoc@colliers.com
