Global manufacturers support expansion of Phl industrial sector
The move of the government to attract more manufacturing investments and diversify sources of foreign pledges is seen to increase demand for industrial spaces in the country, bringing in high value manufacturing investments such as semiconductors.
“Industrial park developers and investment promotion agencies are optimistic that investments secured by the Marcos administration will materialize soon. This should contribute to greater take-up of industrial space and warehouses,” Colliers Philippines Research director Joey Roi Bondoc said.
Bondoc said the government’s thrust to diversify sources of foreign investments also bodes well for the industrial sector as this results in attracting more high-value manufacturing investments such as semiconductors.
He added that developers should consider expanding industrial footprint even outside of Luzon region as well as modernizing warehouses as electronic investments start trickling into the country.
“In our view, the US CHIPS Act and global manufacturers’ move to look for manufacturing hubs outside China should further support the Philippine industrial sector ’s expansion,” Colliers said.
United States Department of State Under Secretary for economic growth, energy, and the environment Jose Fernandez recently shared that the Philippines is among the countries that the US will be working with under a program of CHIPS Act of 2022, which aims to diversify the Western country’s semiconductor supply chain.
US President Joe Biden signed the CHIPS Act in August 2022, appropriating $52 billion in new funding to boost domestic manufacturing and research of semiconductors in the US.
The funding includes a $500 million budget over five years for the US Department of State to diversify its international supply chain.
“Semiconductor manufacturers currently operating in the United States are considering the Philippines for their expansion plans,” Colliers said, citing firms such as Murata, which will build a new production plant in the First Philippine Industrial Park (FPIP) in Batangas and Texas Instruments which recently invested $1 billion for the expansion of its facilities in Clark and Baguio.
In addition, Colliers noted that President Marcos received $250 million worth of semiconductor investment pledges during his November 2023 trip to the US.
“These should further buoy the Philippines’ competitiveness as a semiconductor manufacturing hub,” Colliers said.
To take advantage of the opportunities in the industrial market, Colliers is encouraging industrial park developers to expand especially in central and southern Luzon to capture manufacturing commitments likely to materialize in the next 12 to 24 months.
“Property firms with industrial footprint should follow the government’s program of attracting more investments from non-traditional trading partners. Developers should also coordinate with IPAs to identify pledges likely to materialize in the near term and eventually take-up industrial space,” Colliers said.
Colliers expects the average annual delivery of 120 hectares of new industrial supply between 2024 and 2026.
Among the industrial parks likely to be completed include Batangas Technopark, Filinvest Park-Ciudad de Calamba, and the expansions of Cavite and Pampanga Technopark.