SEMICONDUCTORS and electronics products continue to topbill the country’s export products. This makes it necessary for service providers, like United Parcel Service (UPS) Philippines, to make available efficient logistics services to help start-ups grow and manufacturers thrive in a burgeoning economy.
UPS Philippines Managing Director Chris Buono said the export growth of high-tech manufacturing is attributed to the high quality of products and the lower cost of labor.
The manufacturing sector of the Philippines make up more than half of the country’s industrial sector with the semiconductors and electronics industry being its largest contributor, Buono said.
The semiconductors and electronics industry constituted 41 percent of total exports, enjoyed $918 million worth of foreign and domestic investments, and employed 2.2 million workers in 2013, Buono said, citing the latest government statistics available.
“It’s still a lower-cost market, but the ability of companies in Asia and the Asean region to provide high-value products definitely helps boost exports from the region’s exporters,” he said.
Buono said that, aside from trade with the US and Europe, the country would also see more inter-Asia trade for the next couple of years.
Part of sourcing strategies of manufacturing companies is to find products and services, like transportation, from nearby countries that are readily available and are relatively low-cost.
“So, if you have, say, a company in Singapore, they may be looking into the Philippines, Myanmar or Indonesia to do some of this last-mile assembly for some of their products versus actually pulling them from the US or Europe,” he said.
Buono emphasized the need to invest not only on infrastructure, but on people’s talent in order to maintain the continuous uptrend in export.
The UPS, as a logistics company, relies mainly on its labor force with 1,213 employees in the Philippines.
Although not perceived as a problem, Buono said the differing regulations and processes of the customs bureaus of countries, especially in the Asia-Pacific region, require “specific expertise” to be able to meet the requirements of each country.
“I think also that if we get more standardized customs regulations and processes across some of the Asean countries, facilitates trade will be easier for companies and Asean countries become regular sources of intermediate or raw materials and finished products, as well,” he said.
He listed down lack of infrastructure as a factor that could hinder the perceived growth of the industry.
“I think, specifically speaking about the Philippines, and looking at the current infrastructure buildup, is the ability to move products efficiently around the country,” Buono said.
He cited the lack of innovation as a challenge that could be encountered and addressed through the utilization of technology.
“People have to look at driving innovation, driving creativity, driving solutions and a lot of that is going to be born through the use of technology,” Buono said.
With the continuous rise of technology, the company looks forward to innovations that would help improve their services.
A lot of the anticipation comes from the advancement of Artificial Intelligence (AI), which would boost industries relying on technology for their services and products.
Aside from AI, Buono said countries would dive into the field of Big Data in the future. “Big Data is the ability to analyze existing data you have as an organization and understanding, and reacting or proactively looking at trends—help you drive different investments, innovations and solutions for your customer base,” he said.
Buono also saw these innovations as a catalyst for the rise of smaller companies. “I think you’re going to see a lot more smaller companies being able to rise…because of existing infrastructure we are able to use.”
UPS is a global “express carrier and package delivery company” founded in 1907. It manages the flow of goods, funds and information in more than 200 countries and has different branches around the world.