A business-friendly environment
THE COUNTRY'S INDUSTRIAL PARKS HAVE BEEN INSTRUMENTAL IN ATTRACTING AMBITIOUS PRIVATE MANUFACTURING FIRMS TO SET UP IN THE PHILIPPINES

While the huge private- and state-supported drive to further develop the Philippines’ blossoming Information Technology industry is grabbing all the headlines, there may be a tendency to underestimate the economic importance of the country’s manufacturing industry, one of the most productive in the region.
As a nation of English speakers with strong cultural ties to the United States, the Philippines has developed a work ethic that is strikingly more American than one can find in most Western European nations. And unlike Europeans, who continually try to point out U.S.-European differences, Filipinos like to stress the similarities and are more willing to conform to American tastes.

LAGUNA TECHNOPARK, located in the Laguna province, is a joint venture between Ayala Land Inc., Mitsubishi Corporation and Kawasaki Steel Corporation.

That ethos is most apparent in the major industrial sectors, not least manufacturing. “We have a close affinity and relationship with the United States. Not just politically, but culturally and commercially. The average Filipino inherently understands U.S. culture and is therefore better able to quickly absorb what needs to be done. Thus, he becomes more productive more quickly than others do,” explains Philippine Secretary of Trade and Industry, Manuel “Mar” Roxas.
As a result, Philippine industrial parks, which help drive the national economy and fuel the capital’s bustling financial district, are doing a brisk business.
Especially in demand are locations developed by Laguna Technopark Inc., which was formed in 1989 in response to the government’s call for private-sector participation in countryside development. The company is a joint venture of three established names in the region: Ayala Land Inc., the real estate arm of the Ayala Corporation best known for developing Makati, the country’s leading business and financial center; Mitsubishi Corporation, which is actively involved in marketing Laguna Technopark around the globe; and Kawasaki Steel Corporation, which contributes technical expertise in the engineering and design of Laguna Technopark sites.

Vincent Y. Tan Executive Vice President- Planning Group of Ayala Land, Inc.

Despite its name, the 80 or so locators now operating in the 387-hectares ‘techno’ park in the Laguna province (the country’s largest in terms of locators) are not limited to IT firms, says Ayala Land’s executive vice president-
planning group, Vincent Tan. “Laguna Technopark is export-oriented and is more focused on light manufacturing, especially electronics and automobile manufacturing.” including such big names as Panasonic, Hitachi and Honda.
Bobby Dy, assistant vice president of Ayala Land and general manager of Laguna Technopark Inc. says the key to Laguna Technopark’s success is its
investor-friendly attitude. “We provide world class infrastructure and amenities that make it easy for companies to set up their manufacturing operations,” Mr. Dy explains. “In addition, exporters are provided by the government with generous tax incentives” that are available only to those who locate in areas recognized as special economic zones, such as Laguna Technopark.

Since there are few who can compete with their sites, both Mr. Dy and Mr. Tan say half the battle is won once companies decide to set up in the Philippines. The country’s strategic location in the heart of Asia’s eastern gateway is a key factor for many, especially U.S. firms. The Filipinos’ high productivity rate and low turnover ensure business momentum and generous tax incentives and simplified investment procedures have created an environment that foreign investors find hard to resist.

BEN CHAN President and CEO of Bench

This dynamic business environment has also given life to many local firms, such as Bench, one of the country’s leading clothing retailers and designers, which was started 14 years ago by current president and CEO Ben Chan and now boasts some 200 stores and an annual turnover of about $100 million.
The Gap-like chain, but with more sophisticated designs than its U.S. counterpart, is quickly becoming a complete lifestyle store, selling accessories, food, hair and skin care products and cosmetics. “We are all over the country, in fact we have buyers from Los Angeles,” Mr. Chan says, adding that the company is warming to the idea of setting up franchises overseas. “We get a lot of inquiries from Filipinos in the United States. We will try it out in Guam and see how it works. Then probably by the end of next year we will open one in California.”
To date, Bench’s combination of American-style clothing with Philippine quality and personalized service has been a winner. “Anything American will sell well in the Philippines. So our style is influenced by the U.S., but Bench is 100% a Filipino company,” adds Mr. Chan.