What are the best forms of investment in the Philippines for Chinese investors?
- Real Estate
Investments in the Philippines from China are constantly growing. This profitable business relationship shows no sign of stopping. The cohesive relationship between these two progressive countries allowed for an estimated total investment value of $9 billion. News sites have reported that additional companies will contribute to real estate, tourism, pharmaceutical, and construction industries. This allows for more jobs to be created, giving more people opportunities to grow. As a Chinese company looking to invest in the Philippines, here are some popular industries currently trending in the country.
Real estate is a rapidly growing sector that remains adamant despite economic challenges. More tenants are looking for more diversity from workspaces. More companies want project-oriented spaces that can optimize productivity. In 2018, investments in this sector rose to $190 million in total. Co-working and co-living spaces are said to be the next real estate investment trend. This influx of investments is both exciting for locals and foreigners.
Investors are also looking at commercial establishments. Providing diverse restaurants and fast food options have been proven to attract more people to a certain area. Most commercial properties are looking into converting their spaces into gaming centers. High-roller migrants tend to prefer properties close to gaming establishments or casinos.
In 2018, the percentile growth of Chinese tourists in the Philippines accelerated to 30%. According to the United Nations World Tourism Organization, Philippine tourism was above average in terms of tourism growth. The influx of tourists calls for more hotels to accommodate travelers. In Manila, there are many casino hotel chains available for tourists to enjoy. While at the moment these hotels are enough to accommodate the high influx of visitors, it’s advisable to expand to other secondary tourist areas.
Ever since the rehabilitation of Boracay Island, both foreign and local tourists have flown to other destinations in the country instead. The total capacity of these other destinations is in dire need of improvement in order to keep the areas sustainable, both environmentally and economically. Adding more facilities to accommodate Chinese tourists can avoid the inevitable oversaturation of these areas. Investing in the tourism sector can provide many jobs and opportunities for small local communities.
Oversaturation can easily devastate the community and environment of a particular location. Straining local resources can potentially inflict a lot of damage to the local economy. The last thing investors would want is a pause in their development plans. On a more positive note, local governments are now more concerned about the environment and the effects of uncontrolled investments. The best way to bypass this is to work closely with local government business and environmental regulations.
The local pharmaceutical industry grew to about $164 billion in 2018. With the help of the government, efforts to improve the pharmaceutical market are being doubled. The current economic growth has led to more opportunities for Filipinos. Coinciding with this is the plethora of health problems caused by lack of exercise, proper diet and hereditary diseases, often untreated or simply ignored.
The supply and demand for medicine are higher now compared to before. This has proven to be a difficult issue, especially when it comes to pricing and access. Health care access for rural areas still remains as one of the biggest problems for the underprivileged. Local hospitals are also practicing high retail markups and overpriced pharmaceutical ingredient imports.
The generic medicine market allows more people, especially underprivileged individuals, to access cheaper, but equally effective medicines. Foreign pharmaceutical companies soon followed by providing affordable options to remain in competition with generics. The latest legislation calls for mandatory use of generic medicine for public hospitals. The stigma of generic medicine being ineffective and dangerous has slowly decreased over time, thus making the use of generics more acceptable for the public.
To successfully penetrate the local pharmaceutical industry, answering the demand to make locally produced medicine is the most cut-throat decision an investor can make. Streamlining local medicine production can provide many job opportunities that can improve the quality of life of many citizens.
The Philippine Iron and Steel project will be Southeast Asia’s first steel complex. The project will potentially produce 4.5 million tons of hot-rolled coil and 600,000 tons of slab annually. The output capacity should reach about 8 million tons. This investment in the local steel industry can fast-track many infrastructure projects, both locally and internationally.
The demand for proper infrastructure led to Philippine National Railway projects being pursued. There is a possible PHP 151.3 billion loan agreement for this ambitious project.
Alleviating transportation and infrastructure problems are big and risky investments. However, the risks taken can definitely pay off. Boosting these projects can build stronger business relations with China and the Philippines. Building better infrastructure can also attract more business and potential immigrants, which can directly coincide with increased economic growth.
The growing relationship between China and the Philippines through investments is overall positive. Both economies can enjoy accelerated growth through various trade and investment projects. This relationship can spearhead new technological advances in the Philippines. It’s not just about sharing money, but it’s also about sharing each other’s culture.