Christy Balita
Research expert covering the Philippines
Manufacturing sector in the Philippines - statistics & facts
The Philippines is on its way to becoming an emerging manufacturing hub in Asia, and with the sector continuing to contribute the highest share of the country’s gross domestic product (GDP). Exported manufactured goods were seen to have increased in recent periods as the Philippines integrates into the global manufacturing supply chain and invests in upskilling its current workforce. However, various factors continue to challenge the resurgence of the manufacturing industry, as the country remains import-dependent for its raw materials.
Aside from electronics, the Philippines has a large food manufacturing industry, which generated a gross value added of about 1.8 trillion Philippine pesos in 2022. Among the leading food product exports of the Philippines were animal or vegetable fats and oils and processed foods such as bread, cereals, and dairy products. Food manufacturers in the country also produce flour and sugar for domestic consumption and export. In addition, the Philippines also exports chemicals and chemical products such as fertilizers, petrochemicals, and plastic products.
However, the country continues to be import-dependent on raw materials and intermediate goods such as basic food products and consumer goods, leading to a growing trade deficit. The current export basket needs to be diversified by increasing direct foreign investments in the manufacturing sector, which will increase production output and export revenues.
What products are made in the Philippines?
In 2022, the largest share of exported commodity goods from the Philippines were electronic products, particularly semiconductors and electronic data processing products such as hard drives, making it the biggest contributor to the country’s export sales. Semiconductors are used in many electrical appliances and consumer electronic products such as smartphones and televisions, and the sector also produces final products and specific parts in the medical devices and automotive electronics sector. These products were primarily exported to China, Hong Kong, and the United States.Aside from electronics, the Philippines has a large food manufacturing industry, which generated a gross value added of about 1.8 trillion Philippine pesos in 2022. Among the leading food product exports of the Philippines were animal or vegetable fats and oils and processed foods such as bread, cereals, and dairy products. Food manufacturers in the country also produce flour and sugar for domestic consumption and export. In addition, the Philippines also exports chemicals and chemical products such as fertilizers, petrochemicals, and plastic products.
Challenges affecting manufacturing industry growth
The Philippine manufacturing sector posted modest growth during the first quarter of 2023, as reflected in its purchasing managers’ index, although it remains above the no-change mark of 50. To support industry growth, the Philippine Trade and Industry Department launched the Inclusive Innovation Industrial Strategy that focuses on growing globally competitive and innovative industries. Industry 4.0 strategies, including the use of AI, the Internet of Things (IoT), and 3D printing, will raise productivity, decrease production expenses, and boost output quality. The Philippines is already at an advantage due to lower labor costs and the quality of its workforce, which are critical factors companies consider when building a manufacturing hub.However, the country continues to be import-dependent on raw materials and intermediate goods such as basic food products and consumer goods, leading to a growing trade deficit. The current export basket needs to be diversified by increasing direct foreign investments in the manufacturing sector, which will increase production output and export revenues.
