The high cost of power and the lack of a robust manufacturing base in the Philippines pose significant challenges that may prevent the country from quickly benefiting from the high tariffs imposed by the Trump administration on other nations. Instead, services firms are actively considering the Philippines as an investment destination, according to British Ambassador to the Philippines, Laure Beaufils.
During a recent media reception at her residence, Beaufils shared her personal insights when asked by reporters whether any British manufacturing firms in ASEAN are expressing interest in relocating operations to the Philippines in light of the US tariffs on neighboring countries.
Philippine government officials have expressed optimistic that the Trump tariffs will encourage more manufacturing firms to shift their production to the Philippines, which has received a comparatively lower reciprocal tariff of 17%, in contrast to the higher double-digit rates imposed on its ASEAN neighbors.
However, Beaufils holds a different perspective. “I think the challenge for the Philippines is that the cost of energy is so high and it doesn’t really have a manufacturing base that’s ready right now. And that’s going to be the challenge in terms of whether the Philippines can benefit from higher tariffs on other ASEAN countries,” the ambassador said.
The hope for manufacturers relocating to the Philippines “won’t happen overnight I suspect” because the country has no manufacturing capability just yet.
The British embassy in Manila has also not received any query yet of such purpose although lots of British companies are trading with the Philippines with lots of investments already in the country.
Instead of manufacturing, she said, the services sector is growing in the country. In fact, she said, “We’re seeing a lot of interest from tech companies, cyber companies, that kind of companies.”
In fact, she said, “We’re seeing a lot of interest from tech companies, cyber companies, that kind of companies.”
She noted that these companies represent UK expertise as well, being a services-oriented economy. “We have financial services. We have a lot of British tech unicorns that are interested in the Philippines. But I’d say that that’s the highest level of interest that we’re receiving right now is services because we’re a service economy,” she said.
