The Philippine Market

Five promising sectors for U.S. exporters are summarized below. This list is not exclusive, so if your products or services are not listed here, please contact us using the form at the bottom of this page for an assessment of the market. You may also send an email to request information on typical market entry strategies, opening an office in Manila, and an unscreened list of potential local representatives for your company.

Introduction

Almost any U.S. product or service can find an interested buyer in the Philippines. The country is solidly pro-American, and the government and people are strong allies of the United States. The United States exports almost $7billion annually to the Philippines, making this our 30 largest export market. Thanks to our close relationship over the past 100 years, Filipinos are very knowledgeable about U.S. products and services and have a great affinity for them. Moreover, the Philippines is the world’s third largest English speaking nation, so U.S. firms seldom encounter language problems when doing business with Philippine companies. The U.S. presence is strong and growing.

(1) Information, Communication and Technology (ICT)

The Philippines has emerged as one of the top off-shoring destinations for IT-enabled services (ITES). The industry began in the year 2000 with close to 2000 employees. It now has 500,000 employees and annual revenue of US$9 billion expected for 2010. The industry covers a wide variety of ICT-enabled services, such as call centers, back office support, IT, medical and legal transcription, engineering design, animation and game development. The industry’s 19% growth in 2009, at the height of global recession, helped the Philippines survive without experiencing a negative quarter of GDP growth.

The ITES industry spurs the continued growth in the Philippines IT and telecom industries. The rigorous demands of Business Process Outsourcing (BPO) industry is opening up opportunities for technology providers. It is estimated that US$5,000 worth of hardware and software is needed for every voice-based BPO seat. A non-voice BPO seat on the other hand, requires an investment of US$2,500.

(2) Telecommunications Equipment

The Philippine telecommunications industry is driven by strong consumer demand for mobility. Cellular mobile telephone system (CMTS) is the preferred mode of service with mobile subscribers hitting 70 million in 2010. Broadband users in the Philippines grew to an estimated three million subscribers by the close of 2010. This is expected to post 150-200 percent growth per annum. Broadband growth is driven primarily by the Filipino’s attachment to social networking sites (Facebook, Twitter, Friendster, etc.). Wireless broadband, accessed through multiple technologies (WiFi, WiMax, and 3G) pushed the growth of the sector.

(3) Medical Equipment

The medical equipment market is almost 100% imported since the Philippines do not manufacture medical or surgical equipment. The total importation in 2009 was US$229 million, a quarter of which was imported from the U.S. The next big supplier was China, with a 14% market share, followed by Singapore with 12%, and Germany with 11%. Import data on Singapore may actually reflect trans-shipments from the U.S., Europe, and other Asian countries, including Japan. Local production consists of parts for medical equipment (presumably microchip parts manufactured in the export processing zones).

(4) Water Resource Equipment and Services

The Philippine market for water resource equipment and services is expected to grow by about five percent yearly in view of the current impending projects that address increasing water scarcity, and sanitation and wastewater-related problems. 

The country’s water supply requirement is escalating. The Philippines has an estimated population of 90 million, growing at an average annual rate of 2 %.  Approximately 20-50% of the population does not have access to safe drinking water.  Sixteen national rivers and lakes are already biologically dead and only 33% of river systems are suitable as water supply sources. Depletion of groundwater resources has been an increasing problem in some areas of the country.  

(5) Electrical Power Systems

The Philippines is already a world leader in renewable energy (RE) with a third of its total electric power needs met through renewable sources. A new Philippine renewable energy law (Republic Act 9531) establishes a supportive policy environment that offers fiscal and non-fiscal incentives to equipment manufacturers with the goal of achieving 60% renewable energy generation by 2017. The Philippines is blessed with rich renewable energy resources including robust wind energy sites, ideal solar conditions, and an abundance of hydro and biomass resources. The RE law seeks to spur the development of renewable sources by providing incentives to investors, equipment manufacturers and suppliers.

Additional Industry Sectors, Market Entry Strategies, Other Information
Remember, you can contact us for an assessment of the Philippine market for other products or services not listed here. This free assistance is available only to U.S. exporters of goods and services that have at least 51 percent U.S. content.

Please send an email at Office.Manila@trade.gov to request an assessment of the Philippine market for your products or services.