In past decades the Philippines focused too much in manufacturing but after the first recession this souteast asian nation already learned their lesson. Right now the focus more in the business process outsourcing - callcenters and software development. Although there's a big threat when it comes manufacturing from another episode of global recession I think the Philippines is more stronger now since the BPO is the leading industry in their country.
Having 60% of the Philippines exports being electronics is extremely dangerous to keep the economy running. With the global economic crisis resulting in lower spending in certain items, particularly electronics, the Philippines needs to look at some alternatives and not rely on the global recovery. It would appear that the Philippines has the means to become a significant player in the electronics business, which is rather good considering they are competing directly with all the other Asian countries with cheaper labor.
When the recovery takes place, it looks like the Philippines will be in good shape if they continue to grow as exporters, but relying on too much exporting in one particular segment is a dangerous game to play.
The world economic crisis posed a big challenge to many countries including Phillipines. Down the road, when recovery begin to set in, Phillipines may pick up in electronics and become a center of attraction for manufacturers and supply chain. The only challlenge will be the competitors in the neighbourhood like Indonesia and India.
I was also struck by the drastic reliance on one industry. Though I suppose we see that in other countries and in other sectors particularly dependent on international conditions, say tourism. It's usually pretty disasterous in bad years, as you point out. And in such a large country, more so. It's a huge bet they've made there.
I was in Manilla a little less than a year ago, and was struck by how many of the electronics deals were mid-level retail. I don't know what that represents percentage-wise, compared to big ticket, industrial items, like switching equipment, etc. I'm sure they're looking at work for telcos and infrastructure-scale electronics and adding those numbers to the retail, pc and mobile phone market. I'd love to know how that 60 percent figure breaks down. If it's all or mostly retail, they're really playing a high stakes game.
60% reliant on electronics for exports. 40% consumption is high ticket item electronics. The govt needs to look at these stats and try come up with a more balanced strategy to better ride the storm.
But it will have to overcome fierce competitions from its Asian neighbours.
@Hospice_Houngbo I agree with you. There is lot of competition among Asian countries. Countries like India, Vietnam, Indonesia etc are all offering favourable destianation to investors. The only major challenge most of the asian countries currently face is Inflation which is increasing the manufacturing cost. The country which handles inflation successfully will surge ahead of other nations.
The unresolved EU crisis, hinging on Greece’s likely debt default, has reached all the way to Asia
@Marc, this is really scary indeed. Euro has already corrected significantly against dollor. Experts are predicting euro might even retest its 2008 lows. Do you think these events will impact China and India also or is the impact limited to Philippines and Indonesia ?
"The Phillippines is well positioned for a recovery whenever it comes"
Marc, your article spelt a clear hope for electronics market in the Phillippines once the global financial crisis ebbs. It's surprising - "60 percent of the country's export economy comes from electronics". I hope recovery happens quicker for the Phillippines.
"The unresolved EU crisis, hinging on Greece’s likely debt default, has reached all the way to Asia"
Unfortunately Europe is not united as it should be, we saw a lot of voices and the "word" solidarity you can find only in a lexical page and not in the European policy. We see countries in the European union and outside of the economic union to speculate against the EURO and to invest in potential bankruptcy of Greece. The leaders of today's Europe is far away form the leaders who created the European Union.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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