Benise Balaoing

Factory employees work process sardines at the Mega Prime Foods Inc. (MPFI) manufacturing plant in Sto. Tomas, Batangas March 1, 2023. Marcos visited the manufacturing plant and cited its contribution to the government’s Philippine Development Plan by contributing to food security efforts. Jonathan Cellona, ABS-CBN News

Article (news)

Factory employees

Raine Musñgi

ABS-CBN News

<p>MANILA — The biggest shift in global manufacturing today is not companies abandoning China. It is companies deciding they no longer want to depend on just one country.</p><p>Years of US-China trade tensions, pandemic disruptions, wars in Europe and the Middle East, and growing geopolitical uncertainty have prompted multinational corporations to redesign their supply chains. Instead of concentrating production in a single market, many are adopting a &quot;China Plus One&quot; strategy, expanding manufacturing, logistics, and data infrastructure across Southeast Asia.</p><p>The Philippines believes it can become one of the biggest winners. The Philippine Economic Zone Authority (PEZA) approved P140 billion worth of investments in the first half of 2026, putting the agency on track to hit its P300-billion full-year target, a level that would mark its strongest investment performance in more than a decade.</p><p>&quot;We see a lot of heightened interest in the Philippines,&quot; PEZA Director General Tereso Panga said in an interview on ANC&#x27;s Business Outlook.</p><p>The optimism comes as independent surveys also point to a broader regional shift.</p><p>According to The Business Times Insights: ASEAN Intelligence 2026, an inaugural regional survey conducted with market research firm Kantar, every business leader surveyed plans to allocate new capital within Asia over the next three years as companies adapt to geopolitical uncertainty and supply chain risks. </p><p>The study, conducted in two waves in February and April 2026 to capture the impact of the Middle East conflict, found businesses increasingly favoring ASEAN as their next investment destination.</p><p>Rather than replacing China, multinational companies are increasingly building additional manufacturing and technology hubs across Asia to reduce concentration risk.</p><p>Vietnam has so far emerged as one of the biggest beneficiaries, supported by continued regulatory reforms, export-oriented manufacturing, and aggressive industrial development. The Philippines now wants a larger share of that same investment wave.</p><div><br/></div><div><strong>AI, semiconductors and supply chains</strong></div><p>Panga said the country&#x27;s improving investment story goes beyond traditional manufacturing.</p><p>He cited the Philippines&#x27; participation in the U.S-led <a href="https://www.abs-cbn.com/news/business/2026/4/17/ph-us-to-build-economic-security-zone-in-luzon-1013" rel="noopener noreferrer" target="_blank">Pax Silica</a> initiative, the rapid development of the Luzon Economic Corridor, and New Clark City&#x27;s emergence as a hub for artificial intelligence, advanced electronics, and semiconductor investments.</p><div><a href="https://www.abs-cbn.com/news/business/2026/6/5/can-pax-silica-help-the-philippines-move-up-the-semiconductor-value-chain-1917" rel="noopener noreferrer" target="_blank">Can Pax Silica help the Philippines move up the semiconductor value chain?</a></div><p>&quot;Much of the attention is also being given to the development in the Luzon Economic Corridor... basically it&#x27;s positioning the Philippines to become a global investment hub,&quot; Panga said.</p><p>While public attention has centered on reports that Taiwanese technology giant Foxconn is studying a major project in New Clark City, Panga said interest extends far beyond a single company.</p><p>&quot;It&#x27;s going to be strategic, a big-ticket investment. It will be an anchor locator that will really attract a lot of supply chain providers,&quot; he said.</p><p>He added that PEZA and the Bases Conversion and Development Authority are also working with investors exploring hyperscale data centers, semiconductor manufacturing, subsea cable landing stations, and AI infrastructure not only in Clark but also in Batangas and Davao.</p><p>&quot;We&#x27;re preparing the economic zones for these types of investments, including preparing our power so that we can readily host these data center projects,&quot; Panga said.</p><div><br/></div><div><strong>Biggest PEZA comeback in years</strong></div><p>For PEZA, the numbers suggest that global interest is translating into actual investment commitments.</p><p>The agency approved P140 billion in investments from January to June, leaving another P160 billion to reach its P300-billion target for the year.</p><div><a href="https://www.abs-cbn.com/news/business/2026/1/28/peza-approves-p12-86-billion-in-investments-in-first-2026-meeting-1602" rel="noopener noreferrer" target="_blank">PEZA approves P12.86 billion in investments in first 2026 meeting</a></div><p>If achieved, Panga said the figure would be the agency&#x27;s strongest annual investment performance in roughly 12 to 13 years, approaching the record levels seen between 2011 and 2015.</p><p>He also noted that PEZA has approved more than P900 billion in investments during the Marcos administration, surpassing the roughly P800 billion approved over the entire previous administration.</p><div><br/></div><div><strong>The Philippines is competing, not replacing</strong></div><p>Panga acknowledged that competition for global capital remains intense.</p><p>Vietnam, Malaysia, Thailand, and Indonesia continue to attract manufacturers relocating or expanding operations in Asia.</p><p>Instead of trying to replace China, the Philippines is positioning itself as another strategic base for companies seeking resilience and flexibility.</p><p>That aligns with broader regional investment trends.</p><p>The Business Times-Kantar survey found companies are increasingly prioritizing ASEAN, home markets and China over Western markets for future investment, with 81 percent of planned capital expenditure expected to stay within Asia over the next three years. ASEAN ranked as the top destination for new investment among respondents.</p><div><br/></div><div><strong>Momentum still needs reforms</strong></div><p>Despite the optimism, Panga warned that attracting investors is only half the battle.</p><p>Keeping them will require more industrial land, faster approvals, stronger digital infrastructure, lower energy costs and a workforce equipped for AI-driven manufacturing.</p><p>PEZA currently manages 436 economic zones nationwide but wants another 20 to 30 proclaimed every year to keep pace with investor demand.</p><p>&quot;If we&#x27;re unable to provide them areas, just like that, we lose out to other competitors in the region,&quot; Panga said.</p><p>He also called for amendments to the 31-year-old PEZA law to streamline permits and allow the agency to function as a true one-stop investment authority inside economic zones.</p><p>&quot;We really need to revolutionize how to promote and facilitate investments,&quot; he said.</p><p>For multinational companies rewriting supply chains, speed increasingly matters as much as incentives.</p><p>The next few years could determine whether the Philippines becomes one of Asia&#x27;s preferred destinations for advanced manufacturing, AI infrastructure and semiconductor investment, or whether much of that capital continues flowing to faster-moving regional competitors.</p><div><span class="fr-video fr-deletable fr-fvc fr-dvb fr-draggable" contenteditable="false" draggable="true"><iframe width="640" height="360" src="https://www.youtube.com/embed/vJTYsWsHlao?autoplay=1&amp;wmode=opaque&amp;rel=0" frameBorder="0" allowfullscreen="" class="fr-draggable"></iframe></span><br/></div>

<p>The biggest shift in global manufacturing today is not companies abandoning China. It is companies deciding they no longer want to depend on just one country.</p>

The biggest shift in global manufacturing today is not companies abandoning China. It is companies deciding they no longer want to depend on just one country.

PEZA sees huge investment comeback as global firms diversify beyond China

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PEZA sees huge investment comeback as global firms diversify beyond China

Raine Musñgi,

ABS-CBN News

Published July 17, 2026 02:41 PM PHT

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manufacturing

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