Trade Secretary Ramon Lopez sees uncertainties in the global market as the main reason that pushed multinational companies to shut down, or slow down their operations in the country.
Lopez cited that among the uncertainties globally that drive these companies to rationalize their operations include the U.S.-China trade war and the coronavirus disease 2019.
“It is a trend happening now that multinational firms are rationalizing their regional operations.”
The trade chief said it is a trend happening now that multinational firms are rationalizing their regional operations.
“Look at the world; we are a small player, a small country compared to the global world demand. So, you can expect a lot of this rationalization,” the trade head added.
Japanese carmaker Honda recently announced to cease its manufacturing operations in Sta. Rosa, Laguna under Honda Cars Philippines Inc. (HCPI).
Honda’s car assembly operation is separate from motorcycle manufacturing here which is under Honda Philippines Inc. (HPI). HPI maintains its production and sales in the country.
Likewise, Nokia said that it is shutting down its research and development center in the Philippines, while U.S.-based bank Wells Fargo said it is downsizing its operation in the country from 750 to 50 tech workers.
Lopez said the decision of global companies to shut down their operations is “not unique” to the Philippines, but it is also happening to other countries that host the operation of multinational firms.
“It’s about their competitive stand.”
“It’s about their competitive stand. They may not be competitive in the Philippines but it has something to do with the competitiveness structure of their industry. Look at Honda. Their strength here is in motorcycle not in car,” he said.
But Lopez is optimistic that once the overall global economy improves, these companies are expected to again expand and diversify their production sources.