Philippines: Asia's fast-rising manufacturing hotspot

Gulf News

03-05-2025

There are things that are built in the Philippines that might surprise you
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Manila: When people think of the workforce here, they often think of healthcare or the business process outsourcing (BPO) industry.
Those are absolutely true. But not the whole story.
The Philippines has contributed so much to the healthcare industry, not only domestically but globally. There are nurses, doctors, caregivers, and others helping all over the world.
BPO
It's the same with the business process outsourcing (BPO) industry. The Philippines is number one in this field, generating up to $40 billion a year.
One reason: For such a 'small' Pacific archipelago (7,641 islands), the Philippines produces tens of thousands of university graduates who speak good English, and a critical mass of engineers (about 50,000 per year.
For the uninitiated, a BPO is essentially when a company outsources human services to different parts of the world.
That's why if you pick up the phone and talk to customer service, especially for US/European customers, it's often someone based in the Philippines.
Beyond call centres, there are a lot of industries tied to BPOs. For example, companies involved in software development, Hollywood (think cartoons/ animation), digital marketing, and healthcare services, all from the Philippines.
Scratch the surface
A closer look into what the Philippines does beyond human services reveals the rise of manufacturing physical products.
Most people, when they think of manufacturing, think of China. The mainland, of course, is the global leader, though places like India and Vietnam are catching up.
But the Philippines?
You hear about overseas Filipino workers (migration), corruption, sclerotic bureaucracy, communist rebellion, Moro separatism, and travellers getting hustled at airports.
Certain realities here, and everywhere else, going back to the time of Creation.
Most people don't immediately think 'manufacturing hub'. The reality on the ground shows a slightly different picture today.
Policy is getting tweaked. Some examples: constituting 'green lanes' for strategic investments (EO 18, signed February 2023), streamlining the permitting process for internet infrastructure construction (EO 32, July 2023); and streamlining the permitting process for infrastructure 'flagship' projects (EO 59, April 2024).
These are drawing tens of billions in foreign investments.
Tech manufacturing
In terms of land area, while miniscule compared to the vast Pacific, the Philippines is not physically small in a geodetic sense (the island of Luzon alone is more than twice the size of the Netherlands).
So while pockets of terror still exist in some areas, causing occasional disruptions (and big media coverage), industrial projects do happen, though they get little press.
Manufacturing is not only possible in the Philippines — there's actually a lot.
Let's start with tech: Did you know that some important parts of your smartphones — even your iPhone — are made in the Philippines?
Local staff in these chipmakers are made to sign non-disclosure agreements (NDA), restricting them from sharing anything with anyone, including relatives.
Major companies here produce semiconductors, sensors, circuits, and microcontrollers.
For example, big brands like Samsung, Sony, and Panasonic have production facilities making televisions, audio systems, and other home-related products right here.
Sharp also produces LED screens in the Philippines.
And it's not just consumer tech.
Solar panels, diagnostic medical equipment, headphones, earbuds, and computer peripherals like keyboards, printers (EPSON, Brother) and mice are all manufactured here too. Canon manufactures products in a 30-hectare facility in Batangas, south of Manila.
Autos, aviation
Toyota Philippines manufactures a variety of components used worldwide — including transmission assemblies. Ford is making wire harnesses in Laguna, south of Manila, which are then exported to its factories around the world.
In aerospace, companies like Boeing and Airbus manufacture parts of aircraft interiors and even critical flight control systems like actuators here. The Philippines is a key aircraft repair and maintenance hub in Asia, too.
The Asian nation also has a hugely under-explored oil and gas deposits, besides being blessed with "critical" minerals, like copper, manganese, and nickel.
Massive container ships, bulk carriers and tankers are built here.
This, while Filipinos also dominate the global maritime workforce, manning cruise ships, cargo vessels, and logistics ships around the world.
Toys, fashion
Toys are another big export. From detailed collectible figurines to teddy bears, the Philippines manufactures many toys — including some of the highest-quality ones. It's not all made in China!
Fashion and crafts also play a role.
Take designer bags, for instance. Many Coach purses are made in the Philippines, particularly in Pampanga where one factory employs over 11,000 Filipinos.
If you have a Coach bag at home, check — it might say 'Made in the Philippines'.
Furniture is another booming industry, from design to assembly and export. And let's not forget guitars — Cebu is famous for producing world-class guitars through companies like Allegra.
Computer chips
Go up to the mountain resort city of Baguio (about 3 hours north of Manila), known as country's cultural and vegetable trading capital. Baguio is a fast-rising hub for BPOs – and chips.
Texas Instruments (TI) has invested billions of dollars to manufacture and test semiconductors, digital light processing (DLP) technology and edtech products in its Baguio facility.
Besides TI, Pythos Technology, Enplas Semiconductor, and others have facilities up in the Philippines' Mountain Province.
There are chipmaking facilities rising up in Clark, a hub about 90km north of Manila (soon to be connected by a commuter rail). Not being in the news, or having NDA gags, does not mean nothing's happening.
Behinds the scenes
The Philippines is doing a lot behind the scenes — manufacturing products that people around the world use daily without realising their origin.
Things are moving in the right direction, though not as fast as today's young digital-native generation would want to see.
It's not quite where it needs to be. Infrastructure, or the lack of it, remains a sore issue.
And the way roads, bridges and ports are built here is grossly inefficient (an estimated 20% of national budget, about ₱1.6 trillion a year, goes to kickbacks). There's very little trace of the money trail, so no official has been jailed for sub-par projects. The court system grinds ever so slowly.
But all is not lost.
The so-called 'free zones' here belong to a different dimension, moving at a faster velocity.
Private-public partnerships (PPPs), with rules now updated, have drawn $106 billion (ongoing and approved projects) up until March 2025, mostly going into transport and renewable energy (wind, solar, hydro and batteries) sectors.
A huge jump in green power generation and smoother travel for all are expected.
In 2024, the Philippine Export Processing Zone Authority (PEZA) announced approved investments hit about $4 billion (₱214.176 billion) — a 21.89% spike from 2023, with more in the pipeline.