Korean companies operating in traditional manufacturing hubs like China are “seriously thinking” of moving to the Philippines, according to the Korean Chamber of Commerce Philippines (KCCP).
KCCP president Edward Eun-Gap Chang said the Philippines was strategically located in the Asean, a booming market and an especially attractive one given the recent Asean-Korea free trade agreement (FTA). The Philippines’ young and English-speaking workforce gives the country an edge as well, he said.
However, Eun-Gap said decision makers in these companies were being deterred by limits on foreign ownership and other restrictions imposed in the Philippines.
A company that has to make a big investment in building a big factory, for example, may think twice since the land cannot be acquired and the property would have to be turned over to someone else eventually, he said.
Korean companies keen on expanding to the Philippines are engaged in the production of semiconductors and displays, automotive assembly, steel manufacturing and shipbuilding, according to the Korea Trade-Investment Promotion Agency.
There are existing Korean manufacturers in the Philippines, even in niche areas such as high-value garments, Eun-Gap said.
Power, airports and other infrastructure projects, renewable energy and agriculture are attractive sectors for prospective Korean investors, KCCP said earlier.
Korea Electric Power Corp. and the SK Group are particularly interested in power projects, Eun-Gap said. He said Hanjin, Daewoo, LG, Samsung and carmaker Hyundai were keen on expanding their operations in the Philippines.
As for the Philippines, it is expanding its economic zones (ecozones) to accommodate more locators, Philippine Economic Zone Authority (Peza) Director General Lilia B. de Lima told reporters.
The Philippines has at present 271 operating economic zones. “The developers are developing more economic zones. We won’t run out of new zones,” she said.
Peza hopes to attract more Korean, Japanese, Taiwanese and European investors to locate at the ecozones.
“They have the technology, they have the capital, but they don’t have human capital and we can offer the best human capital,” De Lima said.