Dyson, the world’s leading innovative home appliance manufacturer, is in discussion with the Board of Investments (BOI) for the establishment of a full blown R&D Center in the Philippines as the country becomes a more viable location for foreign manufacturers.
Trade and industry Undersecretary Ceferino S. Rodolfo, who is also BOI managing head, revealed the good news at the virtual business forum entitled “Philippines and Switzerland: Investing Together for a Better Future” organized by the Philippine Department of Trade and Industry, Board of Investments, Philippines-Swiss Business Council, and the Swiss Embassy in Manila in coordination with Switzerland Global Enterprise and Swiss-Asian Chamber of Commerce.
Rodolfo revealed that the British technology company, which started operating here in the Philippines in 2016, is now into discussion for the establishment of a full blown R&D Center in the Philippines.
“Now, we are in discussion for a full blown R&D Center here in the Philippines,” said Rodolfo.
In fact, Rodolfo said that despite the pandemic last year, Dyson announced its software R&D in the country and is now implementing the project.
Rodolfo explained the cost competitiveness for manufacturers exporting to the EU market because of the country’s eligibility under the EU-GSP Plus, which grants zero duty to over 6,000 products from the Philippines.
Rodolfo recalled that Dyson is benefitting from the EU GSP plus privileges where its products enter the EU market duty-free. It designs and manufactures household appliances such as vacuum cleaners, air purifiers, hand dryers, bladeless fans, heaters, hair dryers, and lights.
“Initially they were just looking at one line, because they were not too confident about the human resource skill in the Philippines and our ability to do mass manufacturing. But they were so happy about the result that right now, I think we are now their biggest production base, globally, but not only that, they have gone on to also go into product prototyping and also product development,” said Rodolfo.
These are the advantages that EFTA countries can look forward to when they manufacture in the Philippines. “You can locate here in the Philippines and then export to Europe or to have a more competitive basis because of our FTA and our GSP plus with respect to the EU,” he said.
Rodolfo also announced that the Philippines was able to turnaround from a deficit balance of trade with the four rich states — Switzerland, Norway, Iceland, and Liechtenstein —- a year after the full implementation of the bilateral Philippines – European Free Trade Association (EFTA) free trade agreement.
“On the first full year of implementation in 2019, we turned that around,” said Rodolfo, proudly. Already, the Philippines posted a trade surplus of $47 million. He said this also happened when the bilateral Philippines-Japan , the Philippines first FTA, took effect.
In 2018, a year before the full implementation of the Philippines-EFTA FTA, the Philippines suffered a trade deficit to the tune of $61 million with the EFTA countries.
“So we see these positive things happening,” he said.
Rodolfo said that Switzerland accounts for 96 percent of the Philippines’ total exports to the EFTA countries. Top export product to Switzerland is vacuum cleaners from the world famous brand Dyson, which has a huge manufacturing operation in the country for their home appliances.
The utilization rate for vacuum cleaners is just 53 percent, still quite a long way to go, but very encouraging already. The second major product that the Philippines exports to Switzerland is we have exported, industrial product to Switzerland, would be electrical apparatus for switching electrical circuits basically electronic items, but here the utilization rate is zero percent.
Some of the items could be already eligible for ITA information technology agreement at zero duty, he said.
“I really encourage these companies to look at the Philippines,” he added.
Not only that the manufacturers benefit from low tariffs and access to markets, Rodolfo also cited the country’s adherence to intellectual property protection.