PEZA bets U.S. trade as ace for strong growth
The country is giving currency to the recent statement of United States Secretary of State Antony Blinken that the Philippines is a thriving, critical, and increasingly important trade partner of the US. Blinken made the statement a week after the high-level US delegation led by US Commerce Secretary Gina Raimondo, promised $1 billion (roughly P56 billion) from 22 US companies that are part of her delegation.
The United States government also vowed to strengthen its global semiconductor supply chain during Raimondo’s and Blinken’s visit.
With the pledges, Philippine Economic Zone Authority Tereso Panga said they welcomed the pronouncements, saying “We are more than welcome to be hosting investments from the US EMS-SMS sectors and other industries. As I said before, the Philippines is not only prepared but eager to continue and expand our business ventures with the United States.”
Part of Blinken’s itinerary was a visit to Amkor Technology Philippines’ facility last 19 March, a PEZA-registered global leader in the Outsourced Semiconductor
Assembly and Test industry, located in Muntinlupa City.
Amkor has been in the Philippines since 1989, with its headquarters in Tempe, Arizona, USA. As a valued ecozone investor, Amkor has by far generated around 10,000 direct jobs for its Muntinlupa and Laguna high-tech manufacturing facilities.
During his visit to Amkor, Secretary Blinken highlighted the importance of the Philippines as its partner and reiterated the commitments made by the US Government through Secretary of Commerce Raimondo.
“We continue to look for ways to strengthen even more the partnership between our countries… (I am) very optimistic about all that can be done going forward in ways that will continue to provide (better) jobs here in the Philippines, will strengthen the supply chains, build their resilience, and help power economies going into the next part of the 21st century,” Secretary Blinken said.
Advantages cited
“If you look at what the Philippines is doing in this area, it’s already extraordinary. The Philippines has about 20 percent of the global market for assembly testing packaging, it’s a big part of the Philippine economy representing about 12 percent of PH GDP,” Blinken noted, adding that much can be done to “decrease dependencies and strengthen global supply chains.”
Blinken explained the support the US will provide for the Philippines being one of the seven country beneficiaries of the International Technology Security and Innovation Fund, under the CHIPS (Creating Helpful Incentives to Produce Semiconductors) Act of 2022, which will “make further investments in partner countries to build their capacity, particularly, for example, through workforce development.”
For his part, Amkor president and country manager Norberto Viera noted that this move will open the Philippines to the global market and help the industry get preferential treatment in terms of shipping products to the US, saying that “The US is going to promote the Philippines as one of the supply chain sources [for EMS-SMS products].”
Blinken said the US government plans to “invest $1 billion in the Filipino tech sector and to double the semiconductor factories in the Philippines.” However, he also mentioned the need to address barriers in investments such as logistics and energy.
Sector needs support
ATP President Viera added that the country needs to focus on supporting the sector, saying that “we need to expedite [initiatives] because our competitors are running at 1000 miles per hour and we’re doing 1000 meters per hour.”
For his part, DG Panga provided assurance, saying that “PEZA’s track record has shown that we are ready to support the semiconductor industry, which remains on top of our priority industries, and it will remain the same under my watch.” He added that the roadmap presented by the semiconductor industry to further expand is clear and that the country will be poised to benefit from the CHIPS Act as soon as the country addresses the same barriers.
“We are optimistic about our flourishing partnerships with American investors in various sectors, especially in the Electronic and Semiconductor Manufacturing Services, our bread and butter. This collaboration is expected to enhance our nation’s capabilities in assembly, packaging, and testing, and propel us into sophisticated integrated circuit design and, eventually, wafer fabrication,” according to the PEZA chief.
Panga sees these developments as the prelude to attracting bigger players in the industry, saying that “PEZA looks to engage more semiconductor and chips manufacturers like Taiwan firm TSMC as it moves forward to diversify and elevate its footprint in the industry.”
“Employing a whole-of-government and industry approach, we will continue to push for addressing the barriers for investments and be aggressive in investment promotion and facilitation initiatives as we make the Philippines an enviable destination in the region for the EMS-SMS sector and other strategic industries,” he added.
The United States government also vowed to strengthen its global semiconductor supply chain during Raimondo’s and Blinken’s visit.
Best location options
Panga also noted several advantages for investors who choose to locate in the Philippines, especially within the ecozones which can provide the best location and business ecosystem for investors.