PEZA courts Korean suppliers for Samsung Philippines expansion

PASAY CITY, Philippines — The Philippine Economic Zone Authority is courting more South Korean electronics suppliers to establish operations in the Philippines as Samsung Electro-Mechanics Philippines Corp. moves ahead with a PHP 50.7 billion expansion of its manufacturing operations.

PEZA pursued the investment pipeline during a three-day mission to South Korea from Aug. 25–27 that included a Philippines-Korea Business Forum, meetings with prospective investors and suppliers, and a visit to Samsung Electro-Mechanics Co. Ltd.’s headquarters in Suwon.

PEZA, the Philippine Embassy in Seoul, and the Philippine Trade and Investment Center-Seoul organized the mission, with Aboitiz Economic Estates, BDO Unibank, and Asian Consulting Group as private-sector partners.

A central part of the mission was the Philippines-Korea Business Forum, which drew about 60 participants representing electronics manufacturing and its supply chain, packaging, metals, information technology, tourism, and other industries.

PEZA, PTIC-Seoul, Aboitiz Economic Estates, Asian Consulting Group, and BDO presented Korean investors with information on the Philippine economy, investment incentives, recent tax reforms, banking and financial systems, and the broader business environment.

PEZA Director General Tereso Panga positioned the country’s economic zones as potential production bases for South Korean companies seeking to establish or expand manufacturing and other export-oriented operations in Southeast Asia.

“The growing presence of Korean companies in our economic zones provides us with a solid foundation to further deepen the Philippines-Korea investment partnership,” Panga said.

“Our objective is not only to attract new investors, but also to support the expansion of our existing locators and develop stronger supplier and industry linkages around them,” Panga said.

Philippine Ambassador to South Korea Bernadette Therese Fernandez and representatives of BDO Unibank, Asian Consulting Group, the Industrial Bank of Korea, and Aboitiz Economic Estates also participated in the forum.

Outside the forum, PTIC-Seoul arranged meetings with Korean companies considering Philippine investments, business expansion, market entry, and supplier opportunities.

Among the prospective investors was a diversified company with interests in tourism, including high-end golf resort development, and an affiliate involved in semiconductor materials and information technology manufacturing, according to PEZA.

PEZA also met with South Korean law firm Jipyong LLC to discuss the agency’s investor services and possible cooperation in promoting the Philippines to Korean companies considering overseas expansion.

Other meetings included Geumjeung Industrial Co. Ltd., which manufactures plastic films for the food and beverage industry, and Gaon Cable, a South Korean manufacturer of industrial power and telecommunications cables.

PEZA said it also engaged a manufacturer of printed circuit board adhesives and specialty tapes that is considering the Philippine market.

A major focus of the mission was building a supplier network around Samsung Electro-Mechanics Philippines, or SEMPHIL, as the company carries out its PHP 50.7 billion expansion.

The expansion became the first major project to receive presidential incentives under the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy Act, or CREATE MORE, after the investment was announced in 2025.

Samsung Electro-Mechanics established its Philippine operation in Calamba City, Laguna, in 1997 and began operations in 2000, producing multilayer ceramic capacitors, tantalum capacitors, inductors, and chip resistors used in electronic devices.

PEZA met in South Korea with two Samsung Electro-Mechanics partners and suppliers, including a producer of chemicals used for semiconductor and printed circuit board surface treatment and another manufacturer specializing in precision industrial products used in electronics production.

The latter produces multilayer ceramic capacitor cutting blades, slitter knives, slitting saws, wheel cutters, and nickel mesh using cemented carbide and ceramic technologies, according to PEZA.

Panga said attracting suppliers alongside major anchor companies could broaden the economic impact of Korean investments and deepen the country’s electronics manufacturing base.

“As our major Korean locators expand, PEZA wants to capitalize on the opportunity to bring more of their supply chains to the Philippines,” Panga said.

“This creates a multiplier effect—more investments, stronger local industry linkages, additional exports, and more high-value jobs for Filipinos,” Panga said.

“The Philippine Trade and Investment Centers (PTICs) play a vital role in opening doors by introducing the Philippines and connecting us with prospective investors,” Panga said.

“Once investors arrive on our shores, PEZA handholds them through the registration process and supports their operations as they establish and expand in the country,” Panga said.

The semiconductor and electronics push carries particular economic weight because electronic products remained the Philippines’ largest export category in July, generating USD 4.79 billion and accounting for 58.8% of the country’s total merchandise exports that month, according to the Philippine Statistics Authority.

PEZA’s South Korea mission concluded with Panga’s visit to Samsung Electro-Mechanics headquarters in Suwon, where he met Executive Vice President Jeremy Choi and other company executives to discuss the outlook for the company’s Philippine operations.

Samsung Electro-Mechanics executives told the delegation they see growing demand for multilayer ceramic capacitors, or MLCCs, driven in part by artificial intelligence servers and automotive electronics, according to PEZA.

MLCCs are small electronic components used to store and regulate electrical energy in devices ranging from consumer electronics to vehicles, making them an important part of the broader electronics supply chain.

Discussions in Suwon also covered SEMPHIL’s continuing development and the role of its Philippine manufacturing operation within Samsung Electro-Mechanics’ global production network.

About 30 Tier 1 suppliers of Samsung Electro-Mechanics are expected to visit the Philippines in October to conduct due diligence and assess possible investments as part of efforts to support SEMPHIL’s expansion, PEZA said.

Panga said PEZA would assist SEMPHIL’s expansion and the possible entry of suppliers while seeking to keep Philippine economic zones competitive for advanced electronics and semiconductor manufacturing.

PEZA is also pitching the country as a complementary production location for multinational companies seeking to diversify their Asian manufacturing networks beyond a single country or market.

The agency said some Samsung Electro-Mechanics Tier 1 suppliers that attended the Seoul investment briefing were evaluating the Philippines partly because of its proximity to SEMPHIL, fiscal incentives, workforce productivity, and what they described as relatively reliable electricity in major economic zones.

PEZA also said companies already operating in Vietnam were exploring redundant or complementary production capacity in the Philippines, although investment decisions would depend on individual companies’ costs, supply chains, infrastructure requirements, and market strategies.

Panga said the trend could help the Philippines develop beyond its role as an alternative production site and become a more important complementary manufacturing base in diversified Association of Southeast Asian Nations supply chains.

The investment drive is also supported by the Philippines-South Korea Free Trade Agreement, which was signed Sept. 7, 2023, ratified by President Ferdinand Marcos Jr. on May 13, 2024, and concurred in by the Philippine Senate on Sept. 23, 2024.

The agreement took effect Dec. 31, 2024, under Executive Order No. 80 and expanded preferential market access between the two countries.

Under the agreement, South Korea granted preferential duty-free treatment to 11,164 Philippine products representing about USD 3.18 billion, or 87.4% of Korean imports from the Philippines at the time the agreement was implemented.

The Philippines, meanwhile, committed to eliminating tariffs on about 96.5% of tariff lines covering South Korean products over the agreement’s implementation period, creating additional market access for industries including automobiles and automotive components.

South Korea was PEZA’s largest source of approved investment in 2024, accounting for PHP 51.269 billion that year, according to the investment promotion agency.

PEZA said it now hosts more than 180 companies with significant South Korean equity across industries including electronics manufacturing and tourism.

Those companies have invested more than PHP 120 billion and employ more than 43,000 Filipinos, according to PEZA.

PEZA said it would continue working with PTIC-Seoul, the Philippine Embassy in South Korea, private-sector partners, and Korean industry groups to turn its growing pipeline of investment leads into operating projects as SEMPHIL’s expansion creates new opportunities for suppliers.