DTI banking on investment from companies fleeing China

THE Department of Trade and Industry (DTI) said it is counting on capturing a share of investment from companies exiting China, including those from Taiwan, Japan and South Korea.

Trade Secretary Alfredo E. Pascual said at the Italian Chamber of Commerce in the Philippines Business Luncheon on Thursday that slower growth in China is making investors take a long look at Philippines.

“Previously, some countries in Southeast Asia benefited from China’s strong growth. This has driven investment in these countries, particularly Vietnam, due to its proximity to China,” Mr. Pascual said.

“But, in the current context, where there is slower China growth and a geopolitical situation that has encouraged re-shoring, friend-shoring, or de-risking, companies from Taiwan, Japan, and South Korea are (on the move),” he said.

He said that the Philippines’ market access to Southeast Asia and US markets will be the driver, citing favorable geography as a distinct advantage.

“Given its strategic location in Asia, the Philippines could be a platform for companies to access the 690 million-strong Southeast Asian consumer market,” he said.

“Our proximity to these growing economies can allow it to enter (more) supply chains and be part of inter-country economic systems,” he added.

The economy grew 5.6% last year, though it missed the 6-7% target for the year. Mr. Pascual said that growth still outpaced that of China (5.2%), Vietnam (5%), and Malaysia (3.8%).

“While the Philippine economy performed well despite geopolitical challenges in 2023, we are rallying for an even better outcome this year,” he said.

Mr. Pascual said growth in 2024 will also be driven by private consumption with inflation easing, oil prices falling, and demand rising for Philippine exports as bottlenecks ease.

“Meanwhile, a broad-based expansion in all major sectors of the economy led by services and industry is expected to drive growth on the supply side,” he said.