Giant Chinese electronics companies such as TE Connectivity, Aoxing and TCL are choosing the Philippines as their investment destination for their supply chain diversification strategy following the imposition of higher tariff walls by the Trump administration.
This was gathered by Tereso O. Panga, director general of the Philippine Economic Zone Authority (PEZA) during his his recent visit to China from the Chinese and MNC investors that attended the recent Philippine-China investment meetings in Xiamen, Chongqing, Shenzhen and Dongguan.
Panga noted that the China Plus One Strategy (C+1), which is a supply chain strategy that encourages companies to diversify their supply chain and manufacturing activities away from China to mitigate geopolitical risk, trade tensions, COVID-19 disruptions and rising labor cost that started in 2023, has evolved into C+1+1 with the Philippines as the potential second country investment destination.
“This manifestation was made by some Chinese companies during our roundtable meeting with the leaders of the China Chamber of International Commerce – Dongguan (CCOIC – Dongguan),” said Panga.
The Aoxing group based in Dongguan, an OEM for projector equipment, projector screen and audio-visual products for global brands like HP, Epson and Skyworth has chosen the Philippines for its redundant manufacturing facility intended for the US export market, said Panga.
The Aoxing group, together with its supply chain providers, will join the upcoming CCOIC- Dongguan delegation’s visit to the Philippines.
The PEZA Board has recently approved the P1.7 billion capital investment of TE Connectivity for the manufacture of electro-optical components/devices that will generate more than 2,000 direct jobs. TE Connectivity has committed to undertake more projects including expanding its IT-BPM operations in the Philippines.
Another highlight of the mission was the visit to the smart factory of TCL Technology (TCL) in Shenzhen, he said.
TCL, one of the world’s largest electronics producers and among the leading wafer fab companies in China for solar cells and electronics, will soon set up operations in the ecozones for the manufacture of a pioneering technology product for export to the global market.
At the Philippine investment forum in Xiamen (50 participants), Chongqing (120 participants) and Dongguan (50 participants), a number of Chinese SME companies into various manufacturing industries have expressed their interest to locate in the PEZA zones.
Other than exporting to the US, they want to sell as well their finished products to the domestic market.
Moreover, some existing locators that participated in the forum or invited the Philippine delegation for a factory visit have announced their additional expansion plans for the year such as Bocheng rubbers, Panhua steel, and HYS metal plastic.
An American-Irish company which has 20 production facilities in China alone—a number of MNCs particularly in electronics and EV/automotive sectors have already transferred part of their operations including some of their contract manufacturers to the Philippines.
Further big prospects are Hithium, a global industry leader in energy storage solutions, which high-tech facility we visited in Xiamen; and Penyao, a Shanghai-based company with more than 40 years of experience in advanced waste water treatment industry in China and across Asia—both are looking for Filipino partners to deploy their cutting-edge technology in the Philippines.
In PEZA, we continue to receive as well big ticket investments (in the pipeline) by new investors/global industry leaders out of China such as one of the largest producers of vitamins and dietary supplements, the biggest producer of solar cells/panels with the highest efficiency rating in the market, and one of the biggest manufacturers of TV monitors and projector screens.
Through the initiative of the Philippine Trade and Investment Center and the Consulate General in Chongqing and Guangzhou, the Philippine delegation likewise met with top officials of the Commerce Commission of Chongqing and the China Council for the Promotion of International Trade (CCPIT). The District of Shappingba Commerce Commission in Chongqing even offered a free space for the delegation at the Business Center of the Chongqing Western Logistics Park in Shappingba. This is to assist their Chinese companies wanting to set up manufacturing facilities in the Philippines and to promote exports of ASEAN FCL shipments bound for Europe via the Chongqing-Duisburg Express Container Train route.
To date, PEZA has registered 118 mainland Chinese companies (excluding the 84 Taiwanese and 78 Hong Kong locators) that invested by far a total of P28.7 billion and provided direct jobs to 16,327 Filipinos.
