Opportunities in the Philippines with Hermod Allertsen Vice President of the Italian Chamber of Commerce
The Philippines has demonstrated significant economic growth in recent years, presenting a wealth of opportunities for investors. Fuelled by a young and dynamic population, the country’s economy is rapidly expanding, driven by key sectors such as outsourcing, tourism, manufacturing, and services. Economic reforms and pro-business policies have created a favorable environment, encouraging foreign investments.
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In our interview with Hermod Allertsen, Vice President of the Italian Chamber of Commerce in The Philippines, we gained valuable insights. Hermod, of Norwegian origin, started his career at Fiat Group, gaining extensive experience in the Italian industry. His mission has been to establish markets and promote Italian excellence abroad. His involvement in the Chamber of Commerce is driven by a desire to give back to the Italian industry for the opportunities it provided him. After years of connection with the Philippines, he has permanently relocated to the country.
What do the Philippines represent today in terms of investment opportunities?
Understanding the country’s historical context is crucial. The Philippines underwent Spanish colonization until 1898 and was later under American control until after the Second World War. This period led to the development of infrastructure, hospitals, and education. Manila, in particular, experienced a golden era and was renowned as the “Pearl of the Orient.” Throughout colonization, wealth and power gradually concentrated in the hands of a few families, which still wield significant influence in the business landscape.
Today, Southeast Asia mirrors the growth trajectory of China. Unlike financial hubs such as Dubai, Singapore, or London, the Philippines is witnessing exceptional productive growth like China, which has transitioned into an industrialized country after exhausting its growth potential, Southeast Asia is currently in the midst of development. This is why companies are gravitating towards ASEAN countries, areas that Italy should closely monitor to produce goods such as food, fashion, and technology.
Additionally, the region’s stable growth forecasts, with an expected increase from 115 million to 150 million educated graduates within the next 30 years, make it fertile ground for diverse business opportunities. The Philippines, though facing significant challenges, offers unique prospects. The nation’s privatized structure, managed by prominent local enterprises with substantial investment capacities, attracts excellence to the region.
What are the risks associated with investing in the Philippines?
SACE evaluations indicate a low-risk environment, thanks to political stability and a low banking risk. However, patience is required when investing in this country. Like the situation in China in 1993, where returns on investments were realized only after 7-8 years, being patient is essential to witnessing significant returns on investment.
What is the significance of Southeast Asia for Kelmer’s clients, and how do you recommend approaching the internationalization process in the Philippines?
While many Italian companies still prefer producing in Italy and exporting abroad, my suggestion is to consider local production, leveraging incentives provided by local governments where applicable. Southeast Asia currently offers unparalleled opportunities. The region experiences a growing demand for products and services, driven by factors such as increasing energy consumption due to expected demographic growth by 2040.
This surge in energy consumption will prompt significant investments in infrastructure, management, and production, benefiting the entire supply chain.
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It is important for foreign investors to be aware of the foreign ownership restrictions that apply to certain industries. Understanding these restrictions is crucial to ensure compliance and navigate the legal landscape effectively.
To conclude, given the skepticism surrounding investments in the Philippines, mainly due to distance and lack of information, increasing awareness about the country’s opportunities will undoubtedly attract more investments. With courage, financial resources, and suitable products, the Philippines can be the ideal destination for expanding businesses and exporting the renowned Made in Italy label.
The Italian Chamber of Commerce in the Philippines
