Philippine Standard Time - Tuesday, May 21, 2024,

PEZA welcomes visit of State Secretary Blinken, positive on increased EMS-SMS investments

Friday, March 22, 2024

Pasay City – Following the successful visit of the high-level US delegation led by Secretary Gina Raimondo, the Philippine Economic Zone Authority (PEZA) welcomed the statement of US Secretary of State Antony Blinken that the Philippines is a thriving, critical, and increasingly important partner of the US as the latter aims to strengthen its global semiconductor supply chain.

PEZA Director General Panga said, “We are more than welcome to be hosting investments from the US EMS-SMS sectors and other industries. As I said before, the Philippines is not only prepared but eager to continue and expand our business ventures with the United States.”

This comes after State Secretary Blinken visited Amkor Technology Philippines' (ATP) facility, a PEZA-registered global leader in the Outsourced Semiconductor Assembly and Test (OSAT) industry, located in Muntinlupa City on the morning of March 19. Amkor has been in the Philippines since 1989, with its headquarters in Tempe, Arizona, USA. As a valued ecozone investor, Amkor has by far generated around 10,000 direct jobs for its Muntinlupa and Laguna high-tech manufacturing facilities.

 

Visit of US State Secretary Blinken at the ATP facility in Muntinlupa (Photo courtesy of US Embassy in Manila)

 

In a brief statement after the visit, Secretary Blinken highlighted the importance of the Philippines as its partner and reiterated the commitments made by the US Government through Secretary of Commerce Gina Raimondo during the recently concluded two-day US delegation visit to the country.

“We continue to look for ways to strengthen even more the partnership between our countries… [I'm] very optimistic about all that can be done going forward in ways that will continue to provide even more good jobs here in the Philippines, will strengthen the supply chains, build their resilience, and help power economies going into the next part of the 21st century,” said Secretary Blinken.

 

Advantages for the EMS-SMS sector

“If you look at what the Philippines is doing in this area, it’s already extraordinary. The Philippines has about 20% of global market for assembly testing packaging, it’s a big part of the Philippine economy representing about 12% of PH GDP,” noted State Secretary Blinken. He added that much can be done to “decrease dependencies and strengthen global supply chains.”

State Secretary Blinken explained the support the US will provide for the Philippines being one of the seven country beneficiaries of the International Technology Security and Innovation (ITSI) Fund, under the CHIPS (Creating Helpful Incentives to Produce Semiconductors) Act of 2022, which will “make further investments in partner countries to build their capacity, particularly, for example, through workforce development.”

ATP President and Country Manager Norberto Viera also noted that this move will open the Philippines to the global market and help the industry get preferential treatment in terms of shipping products to the US, saying that “The US is going to promote the Philippines as one of the supply chain sources [for EMS-SMS products].”

State Secretary Blinken said they plan to “invest US$1 Billion in the Filipino tech sector and to double the semiconductor factories in the Philippines.” However, he also mentioned the need to address barriers in investments such as logistics and energy.

ATP President Viera added that the country needs to focus on supporting the sector, saying that “we need to expedite [initiatives] because our competitors are running at 1000 miles per hour and we’re doing 1000 meters per hour.”

For his part, DG Panga provided assurance, saying that “PEZA’s track record has shown that we are ready to support the semiconductor industry, which remains on top of our priority industries, and it will remain the same under my watch.” He added that the roadmap presented by the semiconductor industry to further expand is clear and that the country will be poised to benefit from the CHIPS Act as soon as the country addresses the same barriers.

The PEZA Chief expressed, “We are optimistic about our flourishing partnerships with American investors in various sectors most especially in the Electronic and Semiconductor Manufacturing Services, our bread and butter. This collaboration is expected to enhance our nation's capabilities in assembly, packaging, and testing, and propel us into sophisticated integrated circuit design and, eventually, wafer fabrication.”

DG Panga sees these developments as the prelude to attracting bigger players in the industry, saying that “PEZA looks to engage more semiconductor and chips manufacturers like Taiwan firm TSMC as it moves forward to diversify and elevate its footprint in the industry.”

 

DG Theo Panga conducting investor’s briefing at the PEZA Head Office

 

“Employing a whole-of-government and industry approach, we will continue to push for addressing the barriers for investments and be aggressive in investment promotion and facilitation initiatives as we make the Philippines an enviable destination in the region for the EMS-SMS sector and other strategic industries,” he added.

DG Panga also noted several advantages for investors who choose to locate in the Philippines, especially within the ecozones which can provide the best location and business ecosystem for investors.

In fact, PEZA received recognition from the US Department of State and the US Trade Administration, stating that “the business environment has been notably better in special economic zones, particularly those available for export businesses operated by PEZA. PEZA has received positive feedback for its regulatory transparency, no red-tape policy, and one-stop shop services for investors.”

As a fruit of the recent US trade mission, several companies have already expressed serious interest in choosing the Philippines as the location of their new and expansion projects. Several prospects from other nationalities are also seen entering the Philippines.

As of December 2023, PEZA is home to a total of 478 companies engaged in various EMS-SMS activities. These companies bring in PhP 980.497 Billion of investments, US$27.693 Billion of exports, and 363,113 direct jobs. #