In mid-December 2016, Philippine President Rodrigo Duterte visited Singapore on a state visit, and Singapore President Tony Tan highlighted during a state banquet that an increasing number of Singapore companies is eager to invest in the Philippines. He described the relationship between the two countries as “a robust friendship anchored in a shared vision of peace, harmony, and prosperity for our countries and the region.”
Singapore and the Philippines are founding members of the ASEAN marketplace—the Philippines acts as ASEAN Chair for 2017—and today Singapore is the fifth country for FDI inflows in the Philippines (in 2016), right after the Netherlands, Australia, U.S.A., and Japan, contributing for the 11% of the total US$7.9b FDI inflows.
At the same time, Singapore is the number one trading partner in ASEAN for the Philippines, and its fifth top trading partner, after Japan, U.S.A., Hong Kong, and China, for a total trade volume of US$3.7b, and a 6.6% share of Filipino exports. Meanwhile, the Philippines is Singapore’s 14th trading partner, for a total trade of US$6.5b, and a 2% share of Singaporean exports.
As we all know, Singaporeans enjoy traveling a lot, and 176,057 citizens of the Lion City visited the Philippines in 2016, with Singapore representing the 7th country of origin of international visitors, and almost 3% of the total of 5,967,005 international visitors.
For the record, Singapore registered in 2016 the record number of 16,403,595 visitors. And out of this figure, defined as historic high, 646,643 arrivals were from the Philippines (almost 4% of the total visitors), with peak arrivals in April, May, and December 2016, respectively at 74,245, 76,646, 68,624, and an average daily arrival of 1,771 passengers.
Just the Singapore to Manila air link is flown daily by 13 non-stop flights: four operated by Singapore Airlines, four by Philippine Airlines, two by Tigerair, and three by Cebu Pacific. Additional daily flights are operated between Changi airport in Singapore and the airports of Clark, Cebu, Davao, and Kalibo/Borocay in the Philippines, to accommodate growing demand and offer non-stop connectivity.
On top of trade and travel stats, some 298,000 Filipinos live in Singapore (data related to 2015) with a demographic showing 85,500 professionals, 71,500 domestic helpers, and 141,000 overseas workers.
Filipinos working abroad are the 7th largest group of national migrant workers worldwide, and according to the 2015 survey on overseas Filipinos by the Philippine Statistics Authority, Singapore is the fifth destination in Asia welcoming 5.7% of overseas Filipino workers, right after Saudi Arabia (24.7%), the UAE (15.5%), Hong Kong (5.9%), Kuwait (5.8%), and before Qatar (5.5%). At the same time, Filipino money remittance back home ranks number three according to the World Bank.
Indeed there’s a bright future on the horizon for the Philippines, which recorded at 6.8%, the best GDP growth performance in the ASEAN marketplace when comparing the 5 founding economies: Singapore at 1%, Thailand at 3.1%, Indonesia at 3.5%, and Malaysia at 4.2%.
HSBC forecasted that the Philippines could become the world’s #16 largest economy by 2050. Today the country ranks #30 for GDP, #57 for global competitiveness, #79 for travel and tourism competitiveness, and #99 for ease of doing business.
Several factors showcase that the Philippines offers great opportunities for a foreign investor. As said the Philippines is a growing economy, and a member of ASEAN, set in a prime location in Southeast Asia just three hours away from Singapore, and almost one hour and a half from Hong Kong (of course in flying time). It’s an English-speaking country, with English as official language (along with Filipino which is based on Tagalog), as well as business language, and local Filipino workers are English-speaking on top of being considered a new breed of world-class professionals and often referred to as global knowledge workers. There’s a young, educated, and discerning middle class with a growing spending power, and the country offers a low cost of doing business and an attractive investment landscape.
A major driver for growth is the service sector, with tourism (the contribution of travel and tourism industry to the Philippine’s GDP was 10.6% in 2015 and in line for growth), real estate, and business process outsourcing (number one in the world) as leading segments.
Singapore, with its leading role as business and trade hub in the ASEAN marketplace, remains a priority market for the Philippines for exporting products and services, and support the Lion City’s aerospace industry mainly in the MRO service (Maintenance, Repair, and Overhaul).
Also, Singapore remains a key investment source for the Philippines in priority sectors that among others include infrastructure, construction and public-private partnership projects, and the tourism industry.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Singapore Business Review. The author was not remunerated for this article.
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Antonio Acunzo is the Chief Executive Officer at MTW Group-Marketing that Works!, a market-entry strategy and brand marketing advisory firm founded in Florida, and with Asia-Pacific office in Singapore. He brings with him over 15 years of experience in international business in the US and Asian markets focused on the Luxury and THL industries, and is a regular speaker at marketing and international business events.