Colliers Insights

By Julius Guevara and Joey Roi Bondoc

(First of two parts)

Amid global economic uncertainties, the Philippines continues to attract major industrial locators. Calls for improvement of business and regulatory environment to raise the country’s attractiveness as a manufacturing hub persist. Aside from ease of business registration, the government must ensure that sanctity of contracts is honored, infrastructure network is enhanced, and high power cost is addressed among others. The government should seriously address these issues if it wants to create more job-generating investments and foster inclusive economic growth across the Philippines.

Latest data from the Philippine Statistics Authority show that approved foreign investments dropped by 50% to P272.4 billion (USD4.7 billion) in 2025, the largest decline in five years. Analysts attributed the decline in pledges to the sluggish investor confidence in the Philippines amid global trade uncertainties, natural disasters and the flood control corruption scandal. In 2025, the Calabarzon (Cavite, Laguna, Batangas, Rizal, and Quezon) and Central Luzon regions accounted for nearly two-thirds of total foreign pledges, cornering around P171.2 billion (USD3 billion) worth of investments. By sector, the manufacturing segment covered nearly 30% (P81.4 billion or USD1.4 billion) of total approved foreign investments during the year, with both regions cornering bulk of the manufacturing pledges.

HIGH VALUE MANUFACTURERS LOCATING IN CENTRAL LUZON
Higher-value manufacturers are gravitating towards Central Luzon, taking advantage of the region’s industrial parks, skilled manpower, and improving connectivity to Metro Manila. Aside from big-ticket investments from Coca-Cola and Ajinomoto in Aboitiz InfraCapital’s TARI Estate in Tarlac, Clark Freeport Zone also continues to corner major manufacturing locators. Among the locators expanding in the industrial hub are UET Box Manufacturing, All Fashion Gloves, and DeviceDesign.

UET Box Manufacturing Corp. invested a total of P169.7 million (USD2.9 million) to expand by 10,000 square meters and produce high-quality knitted products (bags, socks, beanies) and custom shipping boxes. French firm All Fashion Gloves, a pioneer locator in Clark which is engaged in the manufacturing and exporting of premium leather gloves, will invest P18.27 million (USD315,000) for the construction of new facilities. DeviceDesign, a South Korean company specializing in wireless technology for the Internet of Things (IoT), invested P103 million (USD1.8 million) for a new factory inside Clark Freeport which will employ more than 500 individuals.

NEED FOR MORE PEZA-ACCREDITED FACILITIES
From 2026 to 2028, Colliers sees the delivery of 930 hectares of new industrial supply in Central Luzon, dwarfing the 245 hectares of expected new supply in Southern Luzon during the same period. With an improving business environment and bullish prospects for the region, we see more higher-value manufacturers locating in Central Luzon, especially in Pampanga, Tarlac, Bulacan, and Bataan.

In our view, the likes of Pampanga, Bulacan, Tarlac, and Bataan will likely remain as attractive industrial locations given their skilled manpower and improving infrastructure. Colliers Philippines believes that the completion of significant industrial supply in Central Luzon should provide opportunities for manufacturers and locators to haggle for more competitive lease rates. The improving quality of these industrial spaces and warehouses should also ensure that the region’s industrial facilities are ready to accommodate high-value manufacturers. The entry of major manufacturers should eventually develop the profile of locators in the region, enhance the industrial region’s supply chain system, and raise the volume and quality of commodity exports coming from the central Luzon corridor.

Meanwhile, some manufacturers continue to prefer locating in the Calaba (Cavite, Laguna, Batangas) corridor in Southern Luzon, the country’s major industrial hub. Among the profiles of locators which recently occupied industrial space in the region include those involved in the manufacturing of printers, air conditioners, air fresheners, and electronics.

This will be discussed next week.

 

Julius Guevara is senior director and head of Capital Markets and Investment Services, while Joey Roi Bondoc is director and head of Research at Colliers Philippines.

RELATED ARTICLESMORE FROM AUTHOR