Among Southeast Asian countries with expected strong growth this year, the Philippines definitely shines. According to the World Bank, the country’s GDP is expected to grow 6.4 percent this year, compared to 5.8 percent last year. The economic expansion sets the stage for a similar growth in the Philippines’ security i
Among Southeast Asian countries with expected strong growth this year, the Philippines definitely shines. According to the World Bank, the country's GDP is expected to grow 6.4 percent this year, compared to 5.8 percent last year. The economic expansion sets the stage for a similar growth in the Philippines' security industry, which is at a relatively young stage compared to other mature Asian markets yet has a lot of room to grow.
In fact, several Philippine security players have pointed out that their operations will grow more than the 6.4 percent GDP expansion. “Last year, we were able to achieve a double-digit growth for video systems. We are expecting a stronger year in 2016 for us,” said Terry Bobier-Ramos, Sales and Marketing Manager for Bosch Philippines.
Security spending will grow as more and more people realize the need to protect lives and assets against criminal activities. Externally, the country continues to deal with terrorists, especially fundamentalists more in the southern parts of the Philippines. Internally, robberies, burglaries, and other crimes also prompt end users to look for security solutions. “In the Philippines, the crime rate is a little bit higher compared with other countries, so the security market is getting bigger every year,” said Noe Arboleda, Sales and Product Manager at Competitive Card Solutions, a distributor of video and access control products.
Government spending
Various government projects are expected, including roads and infrastructure constructions, spurring security needs. “There is a lot of roads being built to combat the traffic congestion. When roads are being built, up north down south, you'll see a lot of trade going in and out,” said Bong Paloma, SVP and GM of ICT Solutions at AMTI, a systems integration company.
Airport and national defense budgets are also expected to rise. Meanwhile, the government also plans to roll out more smart city projects. “You could say that smart city or safer city will be the next big thing,” said Alexis Bernardino, Business Head for Public Safety and Cyber Security at NEC Philippines. “Each local government now has their own command and control center, where they monitor the whole city traffic situation, or anything that's happening within their city, through CCTV and IP cameras.”
Regulations Spur Demands
A unique feature of the Philippine security market is it's regulation-driven. As one example, the so-called “No CCTV, No Business Permit” regulation has been in place for quite some time and is now being enforced in various key cities. The regulation calls for installing video surveillance systems as a prerequisite for setting up businesses.
Meanwhile, the Philippine Land Transportation Franchising and Regulatory Board (LTFRB) has also passed law requiring that video surveillance being installed on buses. “The security industry is now driven by regulation, which is good for security vendors. You don't need to do a hard sale, because it's already required by law,” Bernardino said.
Private investment
Private firms are also poised to increase their spending on security, realizing its importance. Basically, growth will be seen across vertical markets. Residential, hospitality, and healthcare will all be flourishing as developers build apartments, hospitals, hotels, and casinos, among others. “There is a lot of building activities, and that will continue. We don't see any slowdown. There is always a requirement for security and surveillance,” said Eric Lee, Business Development Manager for ASEAN at Flir Systems.
Another area where growth is expected is the business process outsourcing (BPO) industry. Call centers are booming in the Philippines and are seeing greater demands for security. “I think the BPO industry will continue to grow in the secondary and tertiary cities, because the metro capital region is already expensive and saturated. We have established presence in Cebu and Davao to serve our customers,” said Paloma.
The Philippines' unique market characteristics put the country at a strong position to grow, not only this year but over the years to come. In the future we can expect more high-end projects, such as smart city and smart transportation initiatives, to roll out, using more advanced security products and solutions.