Three manufacturing firms from Japan, China and Taiwan are shifting their capacities to their factories in the Philippines to cushion the adverse impact of high tariffs imposed by the Trump administration.
Tereso O. Panga, director general of the Philippine Economic Zone Authority (PEZA), cited these firms as HYS, Fong Shann, and Arkray. The report of these companies doubling down their operations in the Philippines was originally reported by the New York Times (NYT).
Quoting NYT, PEZA said that HYS and Fong Shann, currently located in Lima Technology Center in Batangas, are scaling up to meet demand. Arkray, a medical device company located in the First Philippine Infrastructure Park, is preparing to realign its supply chain through the Philippines.
“Global manufacturers are rethinking their supply chains — and they’re choosing the Philippines,” said Panga in a statement.
Like most countries, the Philippines was also hit with the Trump tariffs, but at lower rate. Goods coming from the Philippines will be taxed 17 percent, still high, but less than half of the rates on products from Thailand and almost a third less than the tariffs on Vietnam.
Aside from the lower tariff in the Philippines compared to other countries, Panga cited the young, skilled workforce, and PEZA’s globally competitive regulatory environment. In addition, he emphasized the enactment of the CREATE MORE law, which grants generous incentive package to investors.
Panga said that the initial foray of some companies into the Philippines also reinforces Asian Development Bank (ADB) in the Asian Development Outlook, which cited the Philippines’ 6 percent GDP growth as one of best performing economies in the region, and JETRO on the 2024 Survey on Business Conditions of Companies Operating Overseas where Japanese respondents with Philippine operations reported improved business confidence and expect profits in 2025.
