Singapore investors urged to look at 5 priority sectors in PH

Published March 28, 2021, 6:00 AM

by Bernie Cahiles-Magkilat

Singaporean investors are urged to explore business opportunities in five priority sectors such as manufacturing, start-up and innovation, services, research and development and infrastructure and public private partnership (PPP) even as he announced that government will be formulating the Strategic Investment Priorities Plan (SIPP) once the CREATE Bill is signed into law. 

Trade and Industry Secretary Ramon Lopez. (ALFRED FRIAS/PRESIDENTIAL PHOTO FILE PHOTO)

Trade and Industry Secretary Ramon M. Lopez said at the 2nd Philippine-Singapore Business and Investment Summit organized by the Philippine Chamber of Commerce and Industry (PCCI) that these sectors are under the DTI’s REBUILD strategy. 

These sectors, he said would power the Philippines to provide basic necessities, support the 4th industrial revolution, address supply chain gaps, development of a more modern Philippines, and generate high value job creation. 

On manufacturing, he said, the Philippine manufacturing industry remained the most important sector for long-term productive employment, value-added generation, and innovation. In the last ten years, the country’s manufacturing and services industry continues to grow. 

For his part, PCCI President Amb. Benedicto V. Yujuico also said that Singaporean firms should invest in six sectors that are considered very attractive for foreign investors. These are agriculture for vegetables and fruits, aquaculture for fish and shrimps growing, financial technology and micro finance, renewable energy like solar and wind, medical and healthcare, and science parks land development. 

Lopez said that as a viable manufacturing hub, the increase of manufacturing cost in the Philippines is more stable compared to other neighboring ASEAN countries,” he stressed adding that the country has one of the lowest wage levels for manufacturing workers and engineers. 

The annual wage- increase for 2019-2020 in the Philippines is steady at 3.4 percent, while the neighboring countries are at higher than 6. 

Singaporean companies could explore diversification and/or expansion opportunities in high-tech or smart manufacturing. With its young and skilled labor pool, the Philippines could be the second home for their production operations. On the other hand, as a technology capital, Singapore could help the Philippines in adopting 4th Industrial Revolution best practices and new technologies. 

On services,  he urged Singaporean firms to consider the Philippines as among the top offshore destinations for BPO and other IT services as it has been making a massive contribution to the current global skills’ shortage. 

Singapore may also take a look at the creatives and animation sectors, including MRO services, where the Philippines has excellent track records as well. 

Alternatively, the Philippines could also be an R&D center and/or a Product Design hub of Singaporean companies as they expand their operations. 

Aside from the country’s dynamic and innovative workforce, it also has support industries for R&D activities. Meanwhile, the government offers incentives for R&D, training activities, and innovation drivers. 

In addition, he Singapore and the Philippines can also explore partnerships and opportunities in technology and innovation. 

Meanwhile, the Philippine government has been providing strong support to the industry through the Philippine Innovation Act and the Innovative Startup Act.

Once the CREATE bill is enacted into a law, Lopez said the DTI be formulating the SIPP, which will list down the priority and/or qualified projects eligible for availment of incentives. The industries of the projects will be prioritized and broken down into three Industry Tiers. 

Tier 1 includes high potential for job creation and emerging industries owing to potential comparative advantage, while Tier 2 includes activities that produce supplies, parts, and components. Meanwhile, Tier 3 includes R&D with significant value added, high productivity, breakthroughs in science and health, and high-paying jobs.

Lopez noted that Singapore continued to be one of Philippines biggest trading partners and investors. Last year, Singapore was the Philippines’ 6th major trading partner, 5th export market, and 6th import supplier. 

On the investment side, Singapore last year ranked as Philippines 4th top source of investments, with approved pledges amounting to P9.99 billion or $201.37 million. Compared to 2019 when Singapore ranked first, investment pledges from Singapore notably decreased last year because of global uncertainties.  Singaporean companies or companies with major Singaporean equity operating in the country include the Philippines Fiber Optic Cable Network, Dyson Electronics, Vires Energy Corp., GMR Megawide, and Pilipinas Newton Energy Corp.