THE PHILIPPINES placed 17th out of 45 countries in Cushman and Wakefield’s manufacturing risk index (MRI), indicating further room for improvement in making manufacturing more attractive to investors.
The ranking was the outcome of the firm’s “baseline” scenario. The Philippines did much better in a scenario weighted towards cost (ninth) and much worse when risk was the main consideration (33rd).
The cost scenario scores countries higher for low operating costs, while the risk scenario favors countries presenting lower levels of economic and political risk.
“While the Philippines has continued to move up in the ranking of countries in the MRI index, there are several factors that will strengthen the attractiveness of the country as a manufacturing destination,” Cushman and Wakefield said in a statement.
A year earlier, the Philippine ranking on the baseline scenario was 28th.
Cushman and Wakefield, a real estate services consultancy, said structural reform is needed to unlock the manufacturing industry.
“While the Philippines maintains strong and growing domestic consumer markets, the country is also beset by lack of qualified labor (i.e., new skills given advancements in technology), aging infrastructure networks and facilities, low commitment on renewable energy sources and still opaque level of business transparency,” it added.
“Overall, the Philippines needs to clearly demonstrate its strength and arrest the weaknesses by dismantling the barriers that make it less competitive in any of the aforementioned factors,” the firm said.
The MRI assesses the most suitable locations for global manufacturing among 45 countries in Europe, the Middle East and Africa (EMEA), the Americas and Asia-Pacific (APAC).
China placed first in all three scenarios, with half of the top 12 countries in the cost scenario being from the Asia-Pacific.
“Asian markets have dominated an annual study ranking top manufacturing destinations according to baseline, cost and risk scenarios, holding the most top quartile rankings of any region across each of the scenarios,” Cushman and Wakefield said.
The report also noted that emerging Asia Pacific markets continue to benefit from expanding labor pools as unemployment rates continue to fall. — Aaron Michael C. Sy