As 2024 unfolds, the manufacturing sector in the Philippines stands as a crucial economic driver, experiencing both challenges and remarkable growth.
Despite recent fluctuations—such as the dip in manufacturing GDP from around PHP 1 trillion in Q1 to PHP 945 billion in Q2—the sector is showing resilience and is poised for continued expansion. Analysts anticipate that by 2025, the manufacturing GDP could reach new highs, potentially climbing to around PHP 1.2 trillion. This growth underscores the critical role manufacturing plays in fueling the country’s development and creating economic opportunities.
In this article, we’ll take a closer look at the biggest players in Philippine manufacturing, exploring the industries and companies that drive its success. From essential sectors like electronics and food processing to the rising stars in automotive and construction materials, we’ll uncover how these industries not only meet local demand but also power the Philippines’ global competitiveness!
1. Electronics
The Philippine Electronics Industry is a key economic force, dominated by Semiconductor Manufacturing Services (73%) and Electronics Manufacturing Services (27%).
With major centers in Metro Manila, CALABARZON, Northern/Central Luzon, and Cebu, companies here lead in advanced manufacturing processes.
In the first part of 2023 alone, electronics exports reached $12.90 billion, representing nearly 60% of the nation’s total exports, with top export destinations including Hong Kong, China, the USA, Singapore, and Japan. This section will explore the major players driving this industry forward and their impact on both local and global markets.
Now that we know its contribution to the market and economy, let’s explore the biggest players in the electronics industry:
Toshiba
With three advanced facilities located in Laguna Technopark and Carmelray Industrial Park, Toshiba plays a major role in the Philippines’ electronics industry, focusing on data storage solutions like hard disk drives (HDDs) and solid-state drives (SSDs).
As a top exporter, Toshiba contributed 6.6% of the Philippines’ electronics exports in the first half of 2021. This high level of performance has earned Toshiba the prestigious Billionaires Award from the Philippine Economic Zone Authority (PEZA) for consistently exporting over $2 billion annually for three years in a row. Toshiba also creates a substantial employment impact, with over 11,000 workers contributing to the local economy and the electronics supply chain.
Texas Instruments
Texas Instruments (TI) is making a major investment in the Philippines, committing up to $1 billion (about PHP 55 billion) to expand its manufacturing facilities in Clark, Pampanga, and Baguio City. This significant move not only addresses the global semiconductor shortage but also aligns with the U.S. CHIPS and Science Act of 2022, which encourages the growth of domestic semiconductor production.
TI’s expansion in the Philippines is set to strengthen the country’s role in the international semiconductor supply chain, building on its contribution in 2022, when semiconductors made up $35 million (around PHP 1.9 billion) of the Philippines’ electronics exports, totaling $46 million (approximately PHP 2.5 billion) overall.
ON Semiconductor
ON Semiconductor is another significant player in the Philippines’ electronics landscape, specializing in semiconductor products for sectors like automotive, industrial, and consumer electronics. With a strong commitment to expansion, ON Semiconductor is positioning itself to meet the increasing global demand for these critical products.
The semiconductor sector itself is crucial to the Philippine economy, making up approximately 45% of total exports. ON Semiconductor’s presence and growth in the region play a vital role in sustaining this essential sector.
Murata Manufacturing
Murata Manufacturing operates multiple facilities in the Philippines, focusing on producing key electronic components like capacitors and inductors.
Murata’s strategic approach emphasizes continuous investment in advanced manufacturing technologies, ensuring efficient production and high product quality. With a commitment to sustainability, Murata is bolstering its local manufacturing capabilities to meet the growing global demand for electronic components. This dedication to innovation makes Murata an important contributor to the strength and growth of the Philippine electronics industry.
2. Food and Beverage (F&B)
The food and beverage (F&B) manufacturing industry in the Philippines is a major contributor to the national economy, making up roughly 23-24% of the country’s GDP. As a key part of the manufacturing sector, F&B accounts for nearly half of its total output, reflecting a sector valued at over €24 billion (around $28.75 billion). This positions the Philippines as one of Asia’s largest food producers.
Driven by population growth, rising incomes, and an expanding middle class, the industry has seen a steady annual growth rate of 8-10%. In 2020 alone, revenue from this sector surpassed $100 billion, and projections indicate a 7.16% CAGR from 2021 to 2027. The sector supports around 4 million jobs across various areas, making it a key player in employment as well.
The F&B landscape covers processed foods, beverages, dairy, and condiments. Major companies like Nestlé Philippines, Pepsi-Cola Products Philippines, and San Miguel Corporation shape market trends and meet the high domestic demand—about 90% of processed output is consumed within the country.
Despite its strong performance, the industry faces hurdles such as intense competition, rising costs, and digital transformation challenges for MSMEs. However, increased investment in logistics and technology is set to improve processing and supply chain efficiencies, securing a promising future for the Philippine F&B manufacturing sector.
With its continued growth and essential role in the economy, the F&B industry remains a cornerstone of economic activity in the Philippines, poised for ongoing development. With this growth in mind, let’s cite some of the major key players in food and beverage manufacturing.
Nestlé Philippines
Nestlé Philippines, a subsidiary of the global food and beverage giant Nestlé S.A., focuses on local sourcing and product innovation. In 2023, the company targets a turnover of ₱170 billion, up from ₱160 billion in 2022.
It continues to expand its coffee and dairy businesses while introducing health-oriented products. With five factories nationwide, over 90% of its products sold in the Philippines are locally produced. Nestlé’s efforts support local farmers and address nutritional needs, with over 60% of its products fortified with essential vitamins.
San Miguel Corporation
San Miguel Corporation has grown into one of the Philippines’ largest and most diversified conglomerates, with operations spanning food and beverage, packaging, and infrastructure. In 2022, SMC reported revenues of ₱1 trillion.
With over 30,000 employees, SMC plays a significant role in employment and community development. The company is also known for its corporate social responsibility initiatives, which include investing in environmental sustainability and community projects.
Pepsi-Cola Products Philippines
Pepsi-Cola Products Philippines Inc. (PCPPI) is the exclusive manufacturer of PepsiCo beverages in the Philippines. Established in 1989, the company serves over 20,000 direct customers and distributes to around 740,000 outlets nationwide.
With recent revenues of approximately ₱40 billion, PCPPI employs about 3,165 people and is dedicated to community engagement. The company actively supports educational initiatives and promotes wellness among Filipinos.
3. Pharmaceuticals
The pharmaceutical manufacturing industry plays a critical role in healthcare and the economy, with several companies in the Philippines making significant contributions.
Unilab, Pfizer, Pascual Laboratories, and GlaxoSmithKline (GSK) are among the leading players in this sector, each with a strong impact on both the local market and global healthcare.
Unilab
Unilab is the largest pharmaceutical company in the Philippines, holding about 20% of the local market. With around 6,000 employees, including 3,500 abroad, the company focuses on providing affordable medications. It produces over 300 prescription and over-the-counter products.
Unilab’s generics brand, RiteMed, offers medicines at 20% to 70% lower prices than multinational brands, earning the trust of many Filipino consumers without sacrificing quality. The company has seen impressive growth, with annual revenue increasing by 27%, and is on track to reach $1 billion in sales.
Pascual Laboratories
Pascual Laboratories, a homegrown Filipino company, has been a key player in the local market for over 70 years. Known for its focus on natural health products, Pascual operates a state-of-the-art manufacturing facility that adheres to strict quality standards.
Its diverse portfolio includes over-the-counter medications and health supplements, making it a trusted brand for Filipino consumers who seek natural and quality healthcare solutions.
GlaxoSmithKline (GSK)
Operating as a multinational corporation, GSK contributes to both the pharmaceutical market and public health in the Philippines.
Through its diverse range of products, GSK enhances competition, which in turn helps lower prices and increase the availability of essential medicines. The company is also involved in various community health programs, working to improve healthcare delivery systems and reach more people in need.
Wrapping Up
We learned that the manufacturing sector in the Philippines continues to thrive, despite some challenges like fluctuations in GDP. With industries such as electronics, food and beverage, and pharmaceuticals driving growth, the sector plays a key role in fueling the country’s economic development.
Electronics remains a dominant force, particularly in semiconductors and electronics manufacturing services. Companies like Toshiba, Texas Instruments, and ON Semiconductor contribute significantly to both local employment and global exports. The sector’s growth is expected to continue as the Philippines strengthens its position in the global supply chain.
In food and beverage manufacturing, the sector’s contribution to the economy is immense, accounting for nearly a quarter of the country’s GDP. Leading companies such as Nestlé Philippines, San Miguel Corporation, and Pepsi-Cola Products Philippines help meet the growing demand while also focusing on sustainability and innovation. Despite challenges like rising costs, the industry is set for continued growth, supported by investments in logistics and technology.
The pharmaceutical sector, driven by players like Unilab, Pascual Laboratories, and GlaxoSmithKline, is also thriving, providing essential healthcare products to the local market and contributing to global health initiatives. These companies ensure that affordable, high-quality medicines are accessible to Filipinos, reinforcing the critical role of the pharmaceutical industry in the country’s economic landscape.
Overall, the Philippine manufacturing industry remains robust, positioning itself for further expansion and development. With key industries showing resilience and adapting to challenges, the sector is on track to contribute even more to the nation’s economy in the years to come.