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The often-overlooked industrial sector continues to largely impress investors, as manufacturing is currently one the best-performing segments not only in the Philippines, but in South-east Asia as a whole. Apart from its favourable location in a rapidly growing region, the Philippines has a distinct advantage thanks to its large, relatively low-cost yet highly educated labour force. Although starting from a comparatively low base, the value of the industrial sector – which includes the subsectors of manufacturing, mining and quarrying, construction, and electricity, gas and water – has expanded rapidly in recent years from $26m in 2000 to $86.7m in 2015. This chapter contains interviews with Patrick Henry Go, President and COO, JG Summit Petrochemicals Group; and Jonathan C Ng, President, Republic Biscuit Corporation.

With the power segment poised to rebound while the oil and gas segment struggles to keep pace with surging demand, the Philippine energy sector is very much in flux. However, years of significant investment in power are now beginning to bear fruit, with thousands of megawatts of new capacity slated to come on-line over the next decade. The arrival of this new electricity supply, in the form of both conventional and renewable sources, should have a substantial effect as the Luzon grid moves from the brink of rolling blackouts during peak summer months to a well-supplied and balanced market. Still unconnected from the Visayas and Luzon grids, the long-neglected Mindanao power system is also experiencing an unprecedented expansion of capacity, which should provide an ample power supply for the foreseeable future. This chapter contains interviews with Guido Alfredo Delgado, President and CEO, Emerging Power Incorporated; and Albert D Altura, President, AG&P.

The Philippines’ insurance sector has been exhibiting strong growth in recent years. While it did experience a slowdown in 2014, and then again in early 2016 ahead of the election, the trend overall has been positive, and its strong performance is likely to continue. Although premium growth remained flat in 2016, insurers are forecast to collect a combined P500bn ($10.6bn) in premiums by 2019, double the amount in 2015. By then, around half the country’s population will be insured, more than triple the percentage in 2009. The push for inclusiveness is adding to new business coming from individuals seeking to build wealth and protect their assets. This chapter contains an interview with Peter Grimes, President and CEO, FWD Philippines.

In recent years the Philippine capital markets have performed well. The benchmark index has quadrupled since the global financial crisis in 2008 on a combination of good policy, strong economic growth, healthy inflows of foreign investment and low international interest rates. In 2016, however, market performance was mixed as the country held elections and the new administration settled in. The benchmark index fell, while the number of new initial public offerings was relatively small, with demand on the light side. However, the new administration is expected to be generally supportive of the markets and to push through a handful of major reforms that have been stalled due to bureaucratic disagreements.

The Philippine banking system has been performing relatively well in recent years. Given the country’s strong economic growth, the sound regulation of the sector by the central bank and the global push towards increasing capital, the local institutions have been safe, sound and profitable. Major metrics are moving generally in the right direction. While many people in the country remain unbanked, the lack of inclusiveness is seen as providing an opportunity for expansion. The sector is now open to 100% foreign ownership, and international institutions have been entering the market in significant numbers. This chapter contains interviews with Amando Tetangco, Governor, Bangko Sentral ng Pilipinas; and Alex Buenaventura, President and CEO, Land Bank of the Philippines.

Strong macroeconomic expansion, rising consumer incomes and soaring import demand has kept trade volumes in the Philippines on a consistent upwards trajectory over the past decade. The country remains in trade deficit, with exports faltering in recent years as a result of external challenges such as low global commodity prices; softening demand in China, Japan and the US; and uncertainty over trade prospects with the EU in light of the Brexit vote. However, rising investment in manufacturing and industry could see the situation shift to a better balance in the coming years. The administration of President Rodrigo Duterte is explicitly targeting increased foreign direct investment, deploying a multi-pronged strategy to attract new inflows. This chapter contains interviews with Ramon M Lopez, Secretary, Department of Trade and Industry; and Vivencio B Dizon, President and CEO, Bases Conversion and Development Authority.