The Philippines and South Korea have identified several potential investments worth $5.647 billion in agriculture, infrastructure, and energy that will take advantage of Korea’s manufacturing and technology prowess and the Philippines’ abundant natural resources and educated workforce.
“Korea has a strong manufacturing base and technology, and the Philippines has plenty of resources and manpower. Therefore, economic cooperation between our two countries could make a big difference,” said Korea Trade-Investment Promotion Agency executive vice president Sung-Keun Oh during the Philippine-Korea Business Partership Forum held in Makati Shangrila Hotel yesterday.
He noted that South Korea’s trade volume with the Philippines has increased to $10 billion from $5.5 billion in 2004.
Korea is currently the country’s fifth largest trading partner.
Oh noted that since 2011, the Philippines has been Korea’s 8th largest investment destination and the third in Southeast Asia after Indonesia and Vietnam.
“Considering the recent influences of China’s business environment, we are greatly interested in the Philippines as an alternative investment destination,” he said.
In the past, Korean companies invested in electronics and semiconductors, traditional power, ship building, and renewable energy. Examples of these investments are the plants constructed and operated by Korea Electric Power that have a combined capacity of 2,350 megawatts and Hanjin Heavy Industries that invested $1.6 billion in the shipbuilding industry.
Korean businesses also became more familiar with Filipinos because of food franchises and cosmetics.
Yesterday, potential partnerships identified in the agriculture sector include the following: the establishment of a 10,000 hectare Banana Plantation and Individually Quick Frozen (IQF) facilities in Calilan District, Davao City within two years with a project cost of $180 million; development of a 180-hectare Cavendish banana plantation in Pikit, North Cotabato within a year with a project cost of $6.1 million; production of robusta coffee in Tagongon, Tagbina, Surigao del Sur ($2.3 million); expansion of a cashew plantation and village level processing of cashew nuts in San Miguel and Caramay, Palawan ($0.76 million); and expansion of muscovado sugar production in Luyan, Mapandan, Pangasinan.
Also, the construction of additional mills for Muscovado sugar production and expansion of sugarcane plantation in 3,000 hectares in Pres. Quirino, Sultan Kudarat; establishment of an abaca fiber processing and marketing in Cubay, Barbaza, Antique ($0.89 million); development of coconut-based textiles and coconut-based organis fertiliser in Tubay,
Jabonga, Kitcharo, and Santiago, Agusan del Norte ($0.38 million) and development of 3,000 hectares for palm oil production in Agusan del Sur ($6.9 million).
Data earlier provided by Kotra identified other potential Korean investments in the Philippines including the following: construction of a three hectare shipyard in the PHIVIDEC Industrial Authority (PIA) property in Misamis Oriental by Hanjin heavy Industries ($2 billion); a 150 MW hydro power plant in Quezon Province by SK Constuction and Western Power (US$0.5B); construction of a hydro power Plant in Benguet, Kapangan area by K-Water ($0.2 billion); indoor arena project in Bulacan by Hanwha ($1.75 billion) and a 560-hectare tourism complex project in Cawag, Subic by Heung-a (Subic-NeoKob) ($1 billion).
Asian Development Bank chief economist Chang-Yong Rhee said the Philippine economy is expected to be “robust” this year and can make up for its weak manufacurting sector through the services sector.
He cautioned, however, against relying too much on the services sector which account for half of economic output and employment because this would not be good for long-term growth.
“The Philippines will do very well this year because the Philippine economy will be robust,” he said. “We believe the Philippines is right to focus on services amid global recovery but infrastructure and investments must be developed. In this respect, Korea can help the Philippines in the manufacturing sector,” he said.