Matrade urges more M’sian companies to venture into the Philippines

MANILA: The Philippines market represents a huge opportunity for Malaysians, especially in the area of infrastructure development, renewable energy (RE), outsourcing and halal products.

Malaysia External Trade Development Corp (Matrade) Manila Trade Commissioner Nyaee Ayup said President Duterte had inked a 2017 Budget that allocated P3.35 trillion (US$69 billion) as expenditure, representing an increase of 12 per cent from 2016 and targeting revenue growth of 10 per cent.

The infrastructure market is not only expected to be one of the largest contributors, but also the fastest growth segment in the construction industry, he added.

Spending plans for infrastructure, education and the police is also expected to see a substantial increase.

“Reports have said the infrastructure market will reach US$14.7 billion in 2020 at a Compound Annual Growth Rate (CAGR) of 14.14 per cent, driven by government plans to develop high-speed rail links, highways, and sea ports through PublicPrivate Partnerships (PPPs).

“Hence, (this) offers tremendous opportunities for Malaysian companies to participate in joint ventures with the local entities undertaking these PPP projects,” she said on the sidelines of the 23rd Asean Economic Ministers (AEM) retreat, here from March 8-10.

In addition, there are vast opportunities for Malaysian companies in RE supply chains such as solar panel installations systems.

“Though the country is considered to be the most developed market for RE, it has one of the highest electricity rates in the region and ranks ninth out of 44 international markets.

“There is a need to increase power generation from various renewable resources such as biomass and solar,” Nyaee said.

Meanwhile, e-commerce in the Philippines is poised to boom with the industry expected to continue at a rate of 10 per cent until 2018.

“The Philippines outsourcing industry aims to increase its share of the global market to 15.5 per cent in 2022 from the current 12.6 per cent.

“Malaysia with strong capabilities in the ICT industry, including e-commerce solutions, payment solutions, ICT security and mobile applications, is set to benefit,” Nyaee said.

As for the halal industry, she said apart from consumer products, Malaysian companies should explore other segments such as restaurants and food franchising business.

There are limited halal restaurants and food establishments in the Philippines, especially in Metro Manila, where the city is the major business hub for the country.

“Currently, there are around 134,000 franchise outlets and around 1500 franchise concepts available in the country.

Of this, 70 per cent are local brands and 30 per cent international,” Nyaee said.

She added food kiosks, full restaurants and fast foods are good entry points for franchises.

Overall, Nyaee said trade and investment ties between Malaysia and the Philippines continued to be strengthened.

However, Vietnam has overtaken the Philippines to be Malaysia’s fourth largest trading partner in Asean.

The Philippines is now in 5th spot. — Bernama