Swedish companies are keen on investing in the Philippine market, particularly in sectors that are picking up here, apart from infrastructure.
A report titled “Philippines – Open for Business” published by Business Sweden identified these sectors as manufacturing, retail and e-commerce, and information technology-business process management (IT-BPM).
“The manufacturing sector is expected to grow steadily in the coming years. It will be a priority investment area for both the public and private sector, given that it has higher employment, income and output multipliers compared to other industries,” it said.
The report underscored the need for enhanced productivity in order for the country to make a significant leap forward in becoming a strong regional player in manufacturing.
“For Swedish companies, this represents a unique and almost untapped opportunity to educate the market in automation and lean manufacturing,” it said.
They also considered the IT BPM industry in the Philippines now a key contributor to socio-economic development, with revenues reaching roughly USD25 million in 2017 translating to over nine percent contribution to GDP.
“In the medium-term, we see that industry dynamics will be driven by rapid technological advancements, such as automation, artificial intelligence, digital transformation and the use of big data and analytics. In our view, higher value jobs which are present in non-voice services, would grow faster compared to the traditional voice sub-segment,” it added.
The report noted the growth in the retail sector as a result of the bullish economy has been coupled with an increase in ecommerce.
It cited Google and Temasek report indicating ecommerce is set to be the largest segment of the online economy in Southeast Asia by 2025, valued at a total of USD 88.1 billion.
“The Philippines’ slice of the ecommerce cake is expected to be USD10 billion. As in many of the Southeast Asian countries, the younger generation is driving the ecommerce wave and Filipinos are particularly eager to embrace the shift to online shopping,” it added.
On opportunities in infrastructure, Swedish suppliers that can offer equipment, solutions and services for critical applications will be able to “find a good, profitable and high growth market for years to come in the Philippines.”
“Private sector-led projects provide larger and more opportunities, as companies that are proponents to PPP (public-private partnership) projects prioritize quality and the actual business case in procurement. Swedish companies are well suited because of their high innovation level,” the report further said.