PH carves niche in electronics

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    Poised to lead. Integrated Micro-Electronics Inc., Ayala’s high-tech manufacturing arm, ranked 18th in the top 50 list of EMS providers and the fifth largest EMS provider in the automotive market.

    The Philippines is slowly and steadily gaining attention from foreign investors around the world, particularly in the electronics sector, the top executive of one of the country’s conglomerates said.

    Speaking at the Harvard Business School Asia-Pacific Advisory Board (APAB) held recently in Taipei, Taiwan, Jaime Augusto Zobel de Ayala, Ayala Corp. chairman, said the Philippines, which has often been overlooked as an investment destination in Asean, is more than ready to compete on a global scale.

    Zobel noted that the country has remained resilient amidst external shocks with 82 consecutive quarters of steady economic growth since 1999, including solid performances even after the 2008 global financial crisis.

    “The country’s purchasing power has also grown, with GDP per capita expanding by 3 percent CAGR (compound annual growth rate) over the last five years, reaching $3,100 in 2018. All these factors, coupled with stable interest rates that support favorable borrowing costs for foreign investors, are the critical pieces that will further sustain the Philippines’ growth,” he said.

    “It is only in the recent years that the Philippines has begun to get noticed. Traditionally, [our country] is not the investors’ first choice—they go to Vietnam or Thailand. But if they look at the actual results, it’s been very positive.  And for Ayala, I think part of the reason that we have grown fairly strong in the last couple of years is that we have kept reinvesting in the country, and the return has been good. With a stable currency, we’ve compounded above average returns over the years,” Zobel added.

    Zobel said even the Asian Development Bank (ADB) and the World Bank noted that a developing country could reach high-income status if its manufacturing output and employment is sustained at 18 percent over a period.

    Zobel believes the Philippines has the ingredients necessary to take advantage of this trend and become an emerging force in electronics manufacturing.

    “The country’s young, skilled, highly mobile and English-speaking workforce (average age of 24 years) is seen as a competitive advantage amidst the advent of the Fourth Industrial Revolution. Furthermore, the current administration’s push for infrastructure development and favorable incentive schemes for manufacturers provide the necessary conditions to allow the Philippines to succeed in this sector,” he said.

    AC Industrials’ Integrated Micro-Electronics, Inc. (IMI), Ayala’s high-tech manufacturing arm, is poised to lead this sector in the country. In 2018, IMI ranked 18th in the top 50 list of EMS electronics manufacturing services (EMS) providers and the fifth largest EMS provider in the automotive market.

    James Wang, Sercomm Corp., president, also a speaker in the APAB in Taipei, noted that his company is among those that have successfully benefitted from the steady rise of Philippine manufacturing. Sercoom employed hundreds of Filipinos for more than a decade.

    Founded in 1992, Sercomm is developing broadband customer premise equipment for global telecom service providers.

    “With (the Philippines’)] proximity to China’s coastal provinces and Taiwan, its geographic advantage helps me manage my supply chain clusters and manage risks in doing business,” Wang said.