The Philippine Trade and Investment Center (PTIC) in Seoul has informed the Department of Trade and Industry (DTI) that the Philippines was reported by the Korea Economic Daily (KED) as the investment destination of choice for Korean small and medium enterprises (SMEs).

“KED, published in Korean, is owned by conglomerates that include Samsung, Hyundai, SK, and LG and has a readership of at least one million,” PTIC Seoul Commercial Counselor Nicanor Bautista said.

The article said Korean SMEs like the Philippines because the average wage here at $300 a month is only half the wage in China. Again, proficiency in the English language is another come-on.

According to Korea Export Import Bank data cited in the article, 69 Korean companies branched out in the Philippines in 2009, 74 in 2010, and 82 in 2011. In the first quarter of this year, the number of new companies in the Philippines increased to 22 from last year’s 19. Among these new companies are Nurian International (garments), Iam (electronics), and Koren (electronics).

Together with a local conglomerate, more than 20 Korean SMEs with plants in China sent an exploratory mission to the Philippines last month, according to the article.

 Bautista cited the article as saying that “because of language, infrastructure, religion and cost competitiveness, China is fast losing its attractiveness to foreign investments.”

The article said that this trend is expected to continue as wages in China are expected to rapidly increase over the medium to long term.

According to Exim Bank data cited in the article, the average minimum wage in China in 2011 has risen 22 percent and is expected to further increase by more than 13 percent by 2015. This analysis is based on the Korean companies’ experience in China. The number of Korean SMEs in China had decreased from last year’s 634 to 533 in the third quarter of this year.

“China is now considered as a market and no longer as a production base,” the article said.

original source: www.malaya.com.ph