Virgilio Lorenzo Jr

As ASEAN manufacturing race heats up, can the Philippines still compete in EVs, AI?

Article (news)

Raine Musñgi

ABS-CBN News

<div><img src="https://od2-image-api.abs-cbn.com/prod/editorImage/1780193922297VINFAST.jpg" style="width:960px" class="fr-fic fr-dib" width="960"/>Vietnamese carmaker VinFast launches its latest fully electric vehicle in the Philippines on May 4, 2026 in Taguig City, Metro Manila. Arthur Fuentes, ABS-CBN News</div>MANILA — Philippine manufacturers are under mounting pressure as rising energy prices, supply chain disruptions, and intensifying competition from ASEAN neighbors force companies to rethink how they stay competitive in a rapidly changing global economy.At the same time, the global shift toward electric vehicles (EVs), automation, and AI-powered production is accelerating the race among Southeast Asian economies to attract investments, modernize factories, and secure a bigger role in future supply chains.Speaking on ANC’s Market Edge, Informa Markets Philippines Business Development Manager Mark Prakasvudhisarn said uncertainty remains high, especially with ongoing geopolitical tensions and global trade disruptions, but companies are pushing forward instead of standing still.“With the war in Iran, everyone is being cautious,” he said. “But it doesn’t change the fact that business must go on.”Across manufacturing sectors, Prakasvudhisarn said three issues continue to dominate conversations among industry leaders: supply chain instability, soaring energy costs, and the growing shortage of skilled workers capable of handling increasingly digital and automated production systems.“What we have heard (from manufacturers) is supply chain disruption, energy costs and skilled workforce,” he said.As manufacturers try to navigate the pressure, companies are no longer just identifying problems — they are actively changing the way they operate.One of the biggest shifts involves supply chains. More firms are now trying to localize production or diversify sourcing away from heavy dependence on a single country, particularly China-centered supply chains. Companies are also building regional backup systems to avoid the kind of disruptions seen during recent global trade and logistics shocks.<div><iframe width="640" height="360" src="https://www.youtube.com/embed/IA1_vsbSyyk?&amp;t=638s&amp;authuser=0&amp;wmode=opaque&amp;rel=0" frameBorder="0" allowfullscreen="" class="fr-draggable"></iframe> </div>Prakasvudhisarn noted that many manufacturers are already reassessing where they place factories and production hubs as tariffs, shipping risks, and geopolitical uncertainty continue to reshape global trade flows.At the same time, businesses are slowly ramping up investments in automation, robotics, and AI-driven manufacturing systems. While adoption in the Philippines has lagged behind some ASEAN peers, companies are increasingly exploring Industry 4.0 technologies such as smart factories, process optimization tools, and connected production systems aimed at improving efficiency and lowering costs.“Quite honestly, it has been slow… based on ROI, exposure to technologies, and after-sales service,” he said.But Prakasvudhisarn emphasized that technology alone will not solve the industry’s challenges. Manufacturers also need to invest heavily in workforce development, particularly in upskilling workers and managers to operate in increasingly tech-enabled production environments.“The skilled workforce and skilled workers will have to arm themselves with the knowledge,” he said.Industry leaders are also closely watching the EV transition, which many see as a rare opportunity for the Philippines to carve out a larger role in regional manufacturing.Unlike Thailand and Vietnam, which already have deeply entrenched internal combustion engine supply chains, the Philippines may have more flexibility to pivot toward newer EV-related manufacturing segments, electronics integration, and semiconductor-linked production.“The shift to EV means there’s huge and massive opportunities here for the Philippines,” Prakasvudhisarn said.Still, analysts and industry players warn that speed of execution will be critical if the country hopes to compete with faster-moving ASEAN neighbors that are aggressively courting foreign investors and expanding industrial capacity.Prakasvudhisarn also urged companies to maximize government incentive programs, particularly under the CREATE MORE law and Board of Investments priority sectors, saying businesses that strategically structure investments around available fiscal incentives are seeing meaningful benefits.“We’ve seen companies that have utilized those incentives to their maximum benefits successfully,” he said.Many of these challenges — from AI adoption and factory automation to EV manufacturing opportunities and supply chain resilience — are expected to take center stage during Philippine Manufacturing Week, happening July 23 to 25 at the World Trade Center in Pasay City. The event is expected to gather more than 300 exhibitors across industrial technology, automotive, manufacturing, and automation sectors.

The global shift toward EVs, automation, and AI-powered production is accelerating the race among Southeast Asian economies to attract investments, modernize factories, and secure a bigger role in future supply chains.

The global shift toward EVs, automation, and AI-powered production is accelerating the race among Southeast Asian economies to attract investments, modernize factories, and secure a bigger role in future supply chains.