Boost in Philippines-Israel Trade: A Closer Look at Electronics and BPO Sectors
The commerce between the Philippines and Israel is expected to see a marked improvement this year, with the electronics and Business Process Outsourcing (BPO) sectors being major contributors to this growth. This positive outlook is based on the insights shared by Israel Ambassador to the Philippines, Ilan Fluss, during the Israel Water Technologies Roadshow to the Philippines.
In a comparison of the trade figures between the two nations, Ambassador Fluss highlighted that trade in 2022 stood at $533 million, showing a modest increase from $522 million the previous year. “2023 was actually similar. And the two countries are actually pushing,” Fluss remarked, expressing his optimism towards the potential growth in trade, reflecting the dynamic cooperation and shared goals of both nations.
Fluss, with his rich background as a former deputy head of Mashav, Israel’s international development cooperation program, emphasized the cultural and business synergy between Israel and the Philippines. “So I’m very optimistic; [it’s] the Israeli mindset. Israeli culture is very relevant and fitting very well with the challenges in the Philippine market and working together with the Philippine people. So we are very, very optimistic and we’re pushing hard to make it happen,” he stated.
A significant area of interest for Israeli companies is the BPO and electronic manufacturing services (EMS) sectors in the Philippines. Fluss pointed out the competitive advantages the Philippines offers, such as lower labor costs compared to Israel, making it an attractive destination for productivity and scaling operations. “We see a lot of Israeli companies in the EMS sector that are moving into the Philippines to do their processes here,” Fluss revealed.
The attractiveness of the Philippines extends to the service sector as well, where there has been a “growing interest” among Israeli firms. This is attributable to the country’s robust offering in terms of cost-effectiveness and scale of production, which align with the innovation and research and development focus of Israeli businesses.
Tomer Heyvi, the head of Israel Economic Mission to the Philippines, shed light on another catalyst for enhanced trade and investment – the Investment Promotion and Protection Agreement (IPPA) ratified by the Philippines. Heyvi suggests that the IPPA can serve as a significant “avenue” for fostering increased bilateral trade and investment between Israel and the Philippines.
According to the Israel Economic and Commercial Mission to the Philippines, exports from Israel to the Philippines amounted to $340 million in 2022, with machinery and electronic equipment being the foremost category, making up 45 percent of exports valued at $183 million. This category encompasses a wide range of products including semiconductors, telephone sets, electronic integrated circuits, among others.
Conversely, Israeli imports from the Philippines in 2022 totalled $193 million, with machinery and electronic equipment again reigning as the top category, accounting for 83 percent of total imports. This included electronic integrated circuits, printing machinery, and more. Additionally, agriculture products and foodstuff, textiles and footwear, as well as optical and medical imports have been notable categories, reflecting a diverse and growing trade partnership between the two nations.
This optimistic outlook on the bilateral trade relations between the Philippines and Israel highlights the promising potential within the electronics and BPO sectors, paving the way for increased economic cooperation and innovation between the two countries.
