THE Philippine Economic Zone Authority (Peza) is now persuading manufacturing firms in China to move to the country, as the government seeks opportunities from the coronavirus outbreak that is slowing trade and business worldwide.
Peza Director General Charito B. Plaza told the BusinessMirror her agency is now in talks with manufacturers in China for their possible relocation to the Philippines. Firms operating in China have taken measures to protect their workers from infection by temporarily shutting down their factories, leading to a disruption in the global supply chain.
Plaza admitted the operations of Peza locators are feeling the effects of these closures, as their shipments are faced with tougher scrutiny in ports here and abroad.
“Our locators are definitely affected with the slow transport of their imports and exports going to China and coming to the Philippines, like their goods have to be quarantined,” Plaza said. “We are expecting companies from China transferring to the Southeast Asian nations, [and] we hope to get a big number of these industries to transfer in the Philippines.”
She added, “We are contacting our network of Peza investment promotion partners to help us convince these exiting companies to come to Peza’s economic zones.”
Asked who are some of the firms the Peza is speaking to, Plaza said she cannot yet bare their names until they finalize their intent to locate in the Philippines. Most of the manufacturers that stopped operations in China due to the coronavirus outbreak are engaged in the production of electronic parts and automobile.
“We can’t divulge yet the names of companies until we finalize their intent to locate in Peza’s economic zones,” Plaza explained.
Largest trade partner
Merchandise trade with China in 2018 jumped 21 percent to $30.83 billion, from $25.48 billion in 2017, making it the country’s largest trading partner. Exports improved nearly 10 percent to $8.81 billion, from $8.01, of which more than half are shipments of electronic parts.
On the other hand, imports surged 26.05 percent to $22.01 billion, from $17.46 billion based on records from the Philippine Statistics Authority.
The Department of Trade and Industry, however, denied that the factory closures in China will seriously dent the country’s trade figures. DTI estimates provided by Trade Secretary Ramon M. Lopez showed 0.5 percent—around $44 million—of Philippine exports go to Hubei province, where the epicenter of the viral outbreak, Wuhan, is located.
On the other hand, 1.2 percent—over $264 million—of Chinese imports originate from Hubei, according to the DTI estimates.
Chinese manufacturers are extending their Lunar New Year holidays to protect their labor force from possible infection. Technology giant Apple, for one, might suffer from parts shortage, as Foxconn and Pegatron, assemblers for iPhone, are based in China.
In South Korea, Hyundai, one of the world’s largest vehicle assemblers, has been compelled to cease production after running out of parts from China.
German Volkswagen and BMW also suspended their operations in China. There are at least 40 German automobile plants in China, resulting in production worth $660 million per day.
There are at least 37,214 confirmed cases and 809 reported deaths—nearly all in China—from the novel coronavirus as of Sunday morning. The respiratory illness first detected in Wuhan has spread throughout many parts of the world, including in Southeast Asia, where there are now 33 cases in Singapore, 32 in Thailand, 16 in Malaysia, 13 in Vietnam and on in Cambodia. In the Philippines, there are three reported cases, all Chinese nationals who flew to Manila.
President Duterte last week issued an order prohibiting the entry of all foreigners from China, Hong Kong and Macau to prevent the further spread of the virus in the Philippines.
Filipino citizens, as well as those holding permanent resident visas issued by the government, may enter the country, but are required to undergo a 14-day quarantine. Further, travel of Filipinos from the Philippines to China is prohibited as well