MANILA: The Philippines could benefit from companies’ decision to relocate their businesses to Southeast Asia as firms absorb the impact of a burgeoning trade war between the US and China, analysts at J.P. Morgan said.
In a report dated June 26, J.P. Morgan said some companies are disclosing “increased production” from Southeast Asia in the first half of the year, while others indicated shifting supply chains in the second half or next year.
Based on its “text mining analysis” of company transcripts, J.P. Morgan said 8 percent of firms that decided to move their operations to Southeast Asia mentioned the Philippines.
Aside from the Philippines, Indonesia and Cambodia also received 8 percent mentions each within the region.
Meanwhile, Vietnam remains the biggest gainer with 47 percent of mentions from companies that disclosed relocation geography.
Thailand received 5 percent mentions.
“In our view, the attractiveness of SE Asia as supply chain relocation geography is underpinned by large working-age populations, relatively low-cost wage structures and high skill levels,” J.P. Morgan said.
“We believe that optimism around the resolution of trade tensions has delayed plans of relocation. In our view, continuing trade tensions will lead to further supply chain shifts,” it added.
“On average, companies have indicated supply chain can shift in 2-3 quarters.”
World leaders kicked off one of their most high-stakes G20 meetings in years Friday.
Read more: Daily Express
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