Shifting Dynamics in Metals

Shifting Dynamics in Metals

During the last ten years, there have been significant changes in the outlook for industry in the Philippines. China, which until recently was the preferred site for off-shore manufacturing, has experienced very rapid increases in the average wage, and is beginning to have labor shortages due to a rapidly aging population. Manufacturing investment is beginning to move away from China and relocating in Southeast Asia, especially in Vietnam, Indonesia, and the Philippines. There are many signs that many export industries lost to China in the last century are beginning to return to the Philippines.

In addition to the domestic problems China has experienced in the manufacturing sector, trade conflicts with the United States resulting from current U.S. administration policies, ethical issues surrounding intellectual property theft, hacking and spying through Internet technology, and industrial espionage have caused numerous foreign firms to reconsider whether it is their best interests to do business with China.

The emphasis on building infrastructure by the current Philippine administration, which plans to bring infrastructure spending to 7% of GDP by 2022, along with the booming housing and commercial building sectors will bring a strong local market for steel products used in construction. Industries in this area should be prepared to supply this market locally in a timely manner to avoid a need for foreign sourcing of critical materials. GDMPI plans to position itself to respond to this demand.

If the Philippines can increase the manufacturing contribution to GDM from the current 20% to a goal of 30% or more, along with 15% of employment, then the Philippines will truly be able to claim that we are an industrialized economy.

Statistics: Manila Bulletin, 1 Jan 2018