PHILIPPINES: Creation Of Chemical Zones Urged

This is part of the recommendations in the initial Philippine Chemical Masterplan prepared by the Samahan sa Pilipinas ng mga Industriyang Kimika (SPIK).

So far, the government has only one designated chemical zone, the Bataan Petrochemical Industrial Zone under Presidential Decree No. 949 and 1803. Several petrochemical firms have established their operations in the Bataan petrochemical zone including the Petron Corp. oil
refinery, the Iranian-owned National Petrochemical Alliance, PNOC AFC Industrial Park (formerly Philippine Petrochemical Development Corp.), Philippine Resins Industries, Inc., and Phoenix Polypropylene Plant (formerly Petrocorp).

The Supreme Court, however, had also ruled that Bataan is not the exclusive site for petrochemical plants in the country.

The SC decision has made it possible for the petrochemical project of JG Summit Petrochemical Corp. to establish its projects in barangay Simlong, Batangas City.

Another recommendation in the industry roadmap is for the industry and government to leverage the ongoing expansion of Petron Corp. and JG Summit and new refinery investments.

The industry roadmap has also pushed for conducting chemical investment roadshows in Japan, Taiwan, South Korea and China to encourage multinational chemical firms to expand here.

According to SPIK, it would not be difficult to market the Philippines as a chemical investment destination by MNCs because the Philippines is the number one country in terms of long-term economic growth.

For one, SPIK said, the Philippines is now the new destination for manufacturing investments and is one of the fastest growing chemical markets in the most dynamic region in the world.

The country's large pool of innovation-driven talent provides the industry a competitive advantage. In addition, the country has a low carbon economy with high utilization of renewable energy.

The government is also committed to sustainability and world-class adherence to environment health and safety standards.

Although the initial masterplan did not speak of incentives for the industry, it has justified why  government should promote this sector.

SPIK stressed the chemical industry is a core industry essential to industrialization. The industry enables integration of industries and there is a strong global demand for chemical products, the masterplan said.

As such, chemical products have strong potential to become one of the top three exports of the country providing diversity to the country's export basket.

The domestic chemical industry is the fourth largest manufacturing subsector in the country, SPIK said.

In 2011, the industry's total trade hit $9 billion of which imports accounted for $6.9 billion and exports $2.1 billion.

Imports have been growing at 13 percent on the average in the last five years. In 2011, imports grew 21 percent.

Exports have been growing faster at 22 percent average in the last five years. Exports grew 20 percent in 2011. The country exports chemicals to 177 different countries.

The estimated industry size of R626 billion would account for 6.7 percent of the country's total gross domestic product, the SPIK masterplan said.

It also provides high-value added to the country's basic products, creates high employment, high productivity and high impact to the government's inclusive long-term growth.

Globally, the chemical market is placed at $6 trillion, making it one of the most tradable products in the world.

This is so because chemicals affect nearly 90 percent of all manufactured products, SPIK noted.The EU is the world's leader with a market size of $600 billion followed by the US with $500 billion, China with $300 billion while Belgium, France and Japan account for $200 billion each.

Source: Daily "The Manila Bulletin", Manila; 10 Apr 2012(Syed Rashid Ali, Karachi, Pakistan)