Published on
January 12, 2024

The Wallex Country Report: Philippines

min read

The next largest archipelago in Southeast Asia after Indonesia, the Philippines is another popular destination for many foreign businesses, particularly because of the population’s fluency in English and vibrant entrepreneurial spirit.  

Home to over 113 million with a young, tech-savvy population, the Philippines is seeing a boom in e-commerce, digital platforms, and the creator economy. Vibrant and dynamic, the Philippines is without doubt one of the most attractive destinations for companies looking to tap into new markets.

Quick Facts

  • Population: 113.9 million
  • GDP (2022): US$404.28 billion
  • Currency: Philippine peso (PHP)
Philippines Top 5 Imports | Wallex
Philippines Top 5 Exports | Wallex
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What are Philippines's top emerging industries? 

Business Process Outsourcing (BPO)

The Philippines is a global leader in the information technology (IT) and business process outsourcing (BPO) industries. It has a large pool of English-speaking, college-educated workers, with the country producing over 500,000 college graduates every year. Accordingly, the Philippines is home to about 1,000 BPO companies with nearly 1.2 million employees. This presents a number of opportunities for businesses in areas such as software development, IT consulting, and IT outsourcing.

One point of interest is that travel companies are turning to the Philippines to set up their BPO offices. As post-pandemic travel demand returns and approaches pre-pandemic levels, businesses are heading to the Philippines to outsource tasks such as customer support, managing booking systems, and other back-office operations.

Shipbuilding and Repairing

The Philippines is the fifth largest shipbuilding nation in the world in terms of global shipbuilding order book size. For decades, local companies have been providing high quality vessels to both the domestic and international markets. The country has a total of 136 shipyards and a workforce skilled in building and maintaining various vessels, including tankers and bulk carriers. These shipyards comply with international standards set by classification societies like DNV, ABS, and BV, ensuring quality production.

However, much of the resources needed to build, repair, and maintain ships such as steel and resin is being imported from outside the country. The lack of local suppliers presents maritime equipment and services businesses with a huge opportunity to be part of the Philippines shipbuilding supply chain.

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Creative Economy

The Philippines’ creative economy amounted to 1.6 trillion PHP (USD 28.1 billion) in 2022, or 7.3% of the country’s GDP for that year. The creative economy is defined by the Philippine Statistics Authority as any one of the following:

  • Audio and audiovisual media activities
  • Digital interactive goods and service activities
  • Advertising, research and development, and other artistic service activities
  • Symbols and images and other related activities
  • Media publishing and printing activities  
  • Music, arts and entertainment activities
  • Visual arts activities
  • Traditional cultural expression activities
  • Art galleries, museums, ballrooms, conventions and trade shows, and related activities

The vibrant creative economy and its talents are things that advertising agencies, events organisers, or publishers can tap on amidst a boom in the Philippines’ artistic, musical, and cultural environment. It also gives businesses globally ready access to a talented pool of English-speaking freelancers to collaborate with.

The Philippine Department of Trade and Industry are also committed to helping these sectors flourish through its Development of the Philippine Creative Industries Project, which aims to develop a Creative Services Special Zone, create a professional development pathway for Filipino Online Creative Freelancers, and build capacity for those in film, live events and performing arts, among others.

Which key imports of Philippines should we monitor? 

Electrical, Electronic Equipment

The Philippine population’s consistently high demand for consumer electronics and gadgets such as tablets and smartphones are one of the drivers of the country’s electrical and electronic equipment imports, and ths is being buoyed by 5G smartphones. On a broader scale, however, this demand is likely coming from its increased manufacturing output, which requires a steady supply of components and equipment for production operations.  

Large companies such as the appliances manufacturer Dyson, optical components manufacturer Asia Optical, and two-wheeler EV maker Yadea have begun establishing plants in the country as well, which will require specialised electrical and electronic equipment.  

To provide reliable and sustainable electricity, the Philippines is also developing smart grid technologies to modernise its power transmission and distribution infrastructure. This will require advanced metering systems, communication networks, and grid management software.  

Mineral fuels, oils, distillation products

The Philippines is highly reliant on imported mineral fuels, oils, and distillation products due to low local production and surging energy demands from population growth and investments in infrastructure development. Coal continues to remain as the Philippines’ top source of power, accounting for nearly 44% of the country’s energy mix for the whole of 2022.  

Contributing to this dependence on fuel and oil imports is the closure of several refineries in the country, including the Caltex and Shell refineries.  

It is expected that liquefied petroleum gas (LPG) imports will increase alongside the country’s economic and population growth, mainly due to adequate distribution infrastructure and its suitability for residential and commercial use. In 2022, commercial already accounted for 89% of overall LPG consumption. These developments have made the Philippines one of the largest fuel importers in Southeast Asia.  

Machinery, Nuclear Reactors, Boilers

Under the “Build Better More” programme, the Philippine government is set to embark on as many as 125 infrastructure flagship projects, with 68 already underway as of Q1 2023. Heavy machinery and manufacturing equipment and components will be crucial for the country to move ahead on these projects that span port modernisation, irrigation and flood management, subway, passenger, and cargo rail construction, and expansion of road network connectivity across the archipelago.  

The Philippines is also set to harness nuclear power as an alternative energy source to replace fossil fuels, with the signing of the 123 agreement with the US on nuclear investment and cooperation.  

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Expand with confidence into Philippines with Wallex

Navigating a foreign market such as the Philippines poses challenges in terms of cross-border FX transactions. Making international payments in PHP to your workforce, partners or suppliers is crucial for your expansion process.

Wallex helps you address these challenges. Pay in PHP with settlements that take no more than two business days with our fully digital platform, which also allows you to time when you convert SGD to PHP, so you get the best FX rates and maximum savings.

It’s fast, it’s easy, and you get full support from a dedicated Account Manager who will ensure you get only the best rates and the help you need. Speak to us today and find out how Wallex can help your business to confidently enter the Philippines.

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