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Sunday, September 28, 2025 Vol. 20 No. 350
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PHL SEEKS BEST SPOT AMID GLOBAL SHIFTS
MINING FOOTPRINT IN MINDANAO An aerial view of a large-scale mining site in Mindanao, a region that hosts some of the Philippines’ richest mineral reserves, including nickel—an essential input for the electric vehicle industry. MARY GRACE VARELA | DREAMSTIME.COM
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As global firms rethink supply chain strategies in the wake of rising costs in China and its continuing trade frictions with the US, a new report says PHL must deepen ecosystem, move up value chain to seize the supply chain shift
By Justine Xyrah Garcia
UALA LUMPUR, Malaysia— Global supply chains are undergoing a major reconfiguration as multinationals diversify away from China, and the Philippines has a window to capture more of this shift if it can build deeper industrial ecosystems and strengthen its services base. Roland Berger Southeast Asia Managing Partner John Low said the country’s advantages—its English-speaking workforce, foothold in electronics, and mineral reserves—provide a platform for growth. He cautioned, however, that cheap labor and tax perks will not be enough to keep investors in place, especially as neighbors sharpen their offers. “The Philippines needs to step up to capture bigger opportunities .… You have some of these rare resources, use that as a negotiating tool with these companies,” Low told the BusinessMirror. The firm’s Asia Supply Chain Reconfiguration report released on Friday showed the Philippines already plays an important role in the global value chain. The country hosts the world’s second-largest outsourcing workforce, which contributes around 9 percent of GDP, and remains a significant player in nickel produc-
tion, supplying key inputs for the electric vehicle (EV) industry. These strengths give Manila a foothold in both services and manufacturing, but Low said they are not enough to guarantee competitiveness in the years ahead.
The shifting regional landscape
LOW noted that global firms have been rethinking supply chain strategies in the wake of rising costs in China and its continuing trade frictions with the United States. This has given rise to the socalled “China+1” strategy, where companies expand into Southeast Asia to reduce dependence on a single hub. “People are coming in now especially even more after the decoupling of the US and China. We are definitely benefiting,” Low said, adding that Vietnam and Indonesia have gained the most so far. Indonesia recorded $55.3 billion in new FDI pledges in 2024, driven by mining and metal refin-
JOHN LOW, global management consulting firm Roland Berger’s Southeast Asia Managing Partner, is seen in an interview with the BusinessMirror in Kuala Lumpur. JUSTINE XYRAH GARCIA
ing, and in 2023 emerged as the largest recipient of intra-Asean FDI at $6.4 billion. Vietnam, meanwhile, secured $38 billion in realized inflows in 2024. The Roland Berger report noted that other countries are also consolidating their positions, with Malaysia strengthening its semiconductor clusters and Thailand expanding its automotive industry, particularly electric vehicles. The Philippines attracted $8.93 billion in net FDI inflows in 2024, higher than the previous year but still well below its neighbors. Data from the Philippine Statistics Authority (PSA) also showed that while total approved investments through promotion agencies reached P1.95 trillion, only P543.62 billion of this came from foreign investors. Investor sentiment reflects the challenge. The 2025 EU-Asean Business Sentiment Survey found that only 40 percent of European companies plan to expand operations in the Philippines, compared with
66 percent in Vietnam, 60 percent in Indonesia, and 57 percent each in Thailand and Malaysia. An additional 48 percent of respondents said they were unsure about expanding in the Philippines, while 12 percent said they would contract their operations. Low said this competitive landscape leaves the Philippines little choice but to build long-term resilience.
Services at a crossroads
THE consultancy firm also pointed to outsourcing as the Philippines’ most reliable growth engine. In its report, it projected that the Philippine workforce in outsourcing is expected to double over the next five to ten years, allowing the country to expand its share of global demand. The sector already handles 10 to 15 percent of outsourcing worldwide, supported by labor costs that are about 70 percent lower than Malaysia’s. Continued on A2
PESO EXCHANGE RATES n US 57.9180 n JAPAN 0.3868 n UK 77.2858 n HK 7.4423 n CHINA 8.1206 n SINGAPORE 44.7727 n AUSTRALIA 37.8378 n EU 67.5556 n KOREA 0.0411 n SAUDI ARABIA 15.4427 Source: BSP (September 26, 2025)