While services now account for 60% of the Philippines’ gross domestic product (GDP) and 57% of its employment, the country is also an exporter of an extremely wide range of products, making its economy unusually resilient and one of the most complex in the world.
Here are just some of the Philippines’ best-known product exports:
1.) Cargo and Passenger Ships
In recent decades, foreign investors have invested heavily in Philippine shipbuilding, with the country now featuring some of the largest and most sophisticated civilian shipyards in the world. These advanced shipyards are mostly located in industrial real estate zones such as the West Cebu Estate in Balamban, Cebu, and the Subic Bay Freeport area in Zambales.
While the annual output is modest by global standards, the Philippines is already one of the biggest exporters of civilian cargo and passenger ships, with neighboring Asian countries being the biggest purchasers of Philippine-made vessels. Notably, shipyards and related investments are currently expanding despite the global economic downturn. This makes it clear that investors see a lot of potential in the Philippines for ship exports.
2.) Integrated Circuits
Many Filipinos are not aware of the vital role Philippine manufacturers play in global electronics supply chains. A large proportion of modern electronic devices, while labeled as being manufactured in other countries, contain electronic components sourced from the Philippines. Thus, while the country’s important role as an integrated circuit manufacturer is not known domestically, it is a well-known fact among foreign investors.
Integrated circuits are currently the country’s biggest exports in terms of value, with USD 28.4 billion worth of these products exported in 2020, representing 28.4% of the country’s total exports that year. This also makes the Philippines the world’s 8th largest exporter of integrated circuits.
The Philippines manufactures a wide range of products in this category, supplying major manufacturers in the Republic of China (Taiwan), the People’s Republic of China, South Korea, and Japan. The most complex types of integrated circuit products manufactured in the Philippines include electronic storage media and measuring instruments.
3.) Office Machine Parts
As with integrated circuits, the Philippines is a major supplier of office machine components, mostly manufacturing them for assembly operations based in the United States, the People’s Republic of China, Thailand, and Germany. These products accounted for about USD 9.32 billion worth of exports, representing 11.7% of the country’s export value in 2020.
While export totals are modest compared to those outputted by China and other major office machine component makers, the country has made significant gains in this area, particularly in making components for higher-end office supply manufacturers.
4.) Minerals Ores and Metals
The Philippines is a major regional exporter of various mineral ores and refined metals, particularly copper, nickel, and gold. It is notably the biggest nickel ore exporter in the world, with almost all of this production destined for the People’s Republic of China.
These minerals and metals are critical in the manufacture of high-tech electronic components, with virtually every circuit board in the world containing traces of copper and gold. Nickel ore is notably rising in value due to the importance of nickel in electric vehicle battery manufacturing and other cutting-edge high-tech applications.
The Philippines is also steadily building its capacity to refine and finish raw ores into metals, which may eventually increase the value of these categories of exports.
5.) Agricultural Products
Agricultural products are doubtlessly the country’s most famous exports, despite these having been long surpassed by manufactured goods in terms of value. However, these products remain a vital part of the country’s global brand image.
The Philippines is renowned the world over for exporting arguably the world’s best mangoes, bananas, and coconuts. It also exports pineapples and other relatively high-value tropical fruits, mostly to other Asian countries. In 2021, the combined value of exported Philippine agricultural products came in at USD 6.79 billion, accounting for just under 10% of the country’s total export value.
More than ever, these products are being processed in industrial real estate areas to make value-added products such as dried snacks, which are extremely popular in East Asian countries.
Industrial Real Estate and Philippine Exports
The country’s most popular product exports leverage the country’s labor advantages in terms of wages and technical skills. These are similar to the reasons why the country’s service industry now dominates its employment and GDP.
It’s notable that while the country has long had a large and highly capable workforce, domestic production and exports generally declined until the expanded development of industrial parks and other industrial real estate projects.
These areas proved crucial for the country’s economic growth since the 1990s, providing the legal framework under which foreign investors could effectively control business decisions and employ the country’s talents.
In both product and service exports, industrial real estate projects played an outsized role. Activities in these zones create a large proportion of the country’s exports and have helped significantly diversify the country’s economy.
Barring any major changes to the country’s laws on business ownership, these zones are likely to remain a highly important component of the country’s economic formula in the foreseeable future.
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