-- Manufacturing investments continue to sustain the country’s economic growth. Central Bank data reveal that foreign direct investments (FDIs) for the first 10 months of 2016 reached USD6.2 billion and the manufacturing sector was among the primary recipients of fresh investments. --

Manila, 28 February 2017 – Commercial real estate services company Colliers International sees more manufacturing investments flowing into the country over the medium term given the investments pledged by foreign businessmen during President Duterte’s visit to Japan and China in October last year. Among these include Toyota’s and Mitsubishi’s commitments to expand their assembly operations in the Philippines. More manufacturing investments should result in greater demand for industrial space and facilities particularly in the Cavite-Laguna-Batangas corridor, the country’s main industrial hub.

Total investment pledges registered with the Philippine Economic Zone Authority (PEZA) for the first nine months of the year reached PHP93.3 billion (USD1.9 billion). The Cavite-Laguna-Batangas region cornered 28% of the total investment commitments from January to September 2016. According to PEZA, “majority” of the investments in the region are intended for manufacturing projects. This indicates that the Cavite-Laguna-Batangas region should expect more manufacturing investments in the medium term.

A slight increase in industrial stock coupled with an uptick in demand led to a decline in the overall vacancy of Cavite, Laguna, and Batangas industrial stock to 9.5% as of H2 2016 from 10.1% in the first six months of 2016. The decline in vacancy is not surprising as major manufacturing investors continue to gravitate toward the Cavite-Laguna-Batangas area due to its proximity to the country’s capital, availability of adequately-skilled labor force, relatively cheaper wages, and improving infrastructure. Crucial in funneling more manufacturing investments to the Cavite-LagunaBatangas corridor is the planned revival of a rail cargo between Manila port and an inland container terminal facility in Laguna.

Aside from Southern Luzon, interest in other viable locations for industrial park development such as Central Luzon has also been increasing. According to Bases Conversion Development Authority (BCDA) about 20 Japanese firms have expressed interest to put up facilities in Clark Green City while a mix of local and foreign manufacturers are exploring the possibility of establishing operations in the 31- hectare Alviera Industrial Park in Porac, Pampanga.

Colliers proposes that developers take advantage of the current administration’s thrust of developing more industrial zones throughout the country. The government, on the other hand, will only be able to entice more firms to develop industrial space if it releases concrete and consistent policies guiding the grant of incentives to industrial park developers and their locators.

Colliers International | Manila 11F Frabelle Business Center, 111 Rada Street Legaspi Village, Makati City 1229 Philippines | Tel: +632 888 9988