Data from Export-Import Bank of Korea (shown here) indicate rising interest in Philippines. Photo from hominitus.wordpress.com
InterAksyon.com
The online news portal of TV5
MANILA - A number of South Korean small and medium enterprises are moving their factories to the Philippines from China, the Department of Trade and Industry said on Wednesday, citing a recent report in a Korean-language publication.
The report ?For Korean SMEs, the Philippines is the Emerging Overseas Investment Destination of Choice? published on December 10 in the Korea Economic Daily cited data from the Export-Import Bank of Korea (Korea Eximbank) showing that a? growing number of South Korean companies are setting up shop in the Philippines.
From 69 in 2009 and 74 in 2010, the number of new South Korean-led firms in the Philippines jumped to 82 in 2011, Korea Eximbank data showed.
?Last year, among the Asean countries, Philippines ranked third after Vietnam (197 companies) and Indonesia (156),? the Korea Economic Daily report said.
During the first quarter of this year, 22 South Korean companies were established in the Philippines, up from 19 in the same period last year. Among the new firms were Iam (electronics), Koren (electronics) and Nurian International (garments).
South Korean SMEs said their Philippine expansion was due to workers? English-language proficiency as well as the lower labor cost here compared with China.
Filipino workers? average monthly salary of about $300 is half of those in China, the Korea Economic Daily article said.
In the Philippines, ?[t]here are six working days a week and it is possible to work on weekends even without overtime. English is the most commonly used, and communication is not a problem,? it said.
The report cited the experience of South Korean firm Nanos, a manufacturer of infrared rays block filters for smartphones, which expanded in the Philippines last year because of ?skyrocketing? labor expenses in China.
?It is hard to expect any merits in China, therefore, they built a new factory and they are planning for mass production starting December 2012 in the Philippines. They will just maintain their existing operations in China, but additional investments will, from hereon, be diverted into the Philippines,? Korea Economic Daily quoted Nanos president Hae Jin Lee as saying.
The article said over 20 South Korean SMEs that operate in China as well as a local conglomerate visited the Philippines last month for an exploratory business mission.
The report quoted a member of the said business delegation as saying that ?the cost of labor in the Philippines is better than China?s, and the country?s infrastructure such as power and roads are much better then Vietnam?s.?
The Korea Economic Daily article also quoted Korean Chamber of Commerce Philippines president Edward Eun-Gap Chang as saying that investment inquiries from South Korean SMEs, most of which are operating in China, have risen during the past few months.
?He [Chang] believes that because of language, infrastructure, religion and cost competitiveness, China is fast losing its attractiveness to foreign investments,? the report said.
It said China is losing South Korean SME investments and expansion projects to Asean countries like the Philippines, as ?China is now considered as a market and no longer as production base.?
Korea Eximbank data showed that the average minimum wage in China went up by over a fifth last year and is poised to continue rising by over 13 percent in 2015. Hence, the number of South Korean SMEs operating in China dropped to 533 during the third quarter of this year from 634 last year.
The Philippine Trade and Investment Center (PTIC) in Seoul said the Korea Economic Daily is among South Korea?s ?most widely read and respected economic dailies.?
?Owned by a syndication of conglomerates that include Samsung, Hyundai, SK, and LG, it has a readership of at least one million,? said PTIC Seoul commercial counselor Nicanor Bautista.
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Source: http://www.interaksyon.com/article/51309/for-korean-smes-more-fun-investing-in-philippines
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