Summary
Highlights
Foreign investors, from manufacturing to banking, have been leaving the Philippines. Notable exits include Intel (2008), Ford (2012), Hanjin Philippines (2019 bankruptcy), and Citibank (2021). While these departures might suggest a poor local economy, the video explores specific reasons for each company's exit, including global uncertainty and inadequate infrastructure concerns.
Intel, a significant US semiconductor firm in the Philippines, closed its facility amidst a 90% drop in fourth-quarter profits and a 23% sales slowdown in 2008. While Intel cited a broader restructuring and global financial crisis affecting the semiconductor industry, observers also pointed to high energy costs and Intel's move to leverage lower wages in Vietnam. Despite Intel's exit, the Philippine electronic industry, led by companies like Texas Instruments, continued to grow, indicating Intel's own underperformance globally since the early 2000s also played a role.
Citibank, a dominant foreign bank, announced its exit from consumer and retail banking in the Philippines in 2021 as part of a global withdrawal from 13 countries. This decision reflects Citibank's struggle to regain its pre-global financial crisis performance, with net income significantly lower than in 2006. Unionbank, a local Philippine bank, acquired Citi's consumer business for $1 billion, demonstrating local companies' capacity to absorb and grow these operations.
Ford closed its Philippine assembly plant in Santa Rosa in 2012, citing a lack of a strong business case for local manufacturing and opting to supply the market by importing from its Thai plants. While this might suggest issues with the Philippines, the fact that Mitsubishi Motors acquired the same plant two years later indicates that Ford's performance in the local market was the primary issue, rather than insurmountable problems with the Philippine business environment itself. Other companies are willing to step in and succeed where others have failed.
Hanjin Philippines declared bankruptcy due to over $1.4 billion in debt and the damaged reputation of its parent company, Hanjin Shipping. However, the shipyard was later revived by Cerberus Capital Management and now hosts HD Hyundai Heavy Industries, the world's largest shipbuilding firm. This exemplifies that even when a foreign firm collapses, new and sometimes stronger entities emerge to take its place, further suggesting that the departure of these companies is often company-specific rather than a reflection of the overall Philippine economy.