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Philippines: Growth continues amid positive factors

Philippines: Growth continues amid positive factors
The Philippines' security industry is strong and robust as ever, and the growth trend is set to continue. Backed with a strong economy as well as a booming construction market, spending on security is unlikely to stop. Further, more than ever, Philippine end users are more aware of what security technologies can do for them, not just to keep them safe and secure but also to optimize efficiency and business intelligence.

The Philippines' security market, like the country's weather, is still hot. “The growth potential is fantastic. We've been saying that for a few years now, and things have not changed,” said Winston Goh, Regional Marketing Head for South Asia Pacific at Axis Communications. “The economy looks reasonably strong, and the commitment from the government in terms of infrastructure development is there. So I would say a minimum of 10 to 15 percent growth is expected for the market as a whole.”

A lot of companies said they were either expanding or expecting growth that beats the market average. "The market for the Philippines is like a glass of water, only it's less than half full. So there's a lot of opportunities,” said Rudy Guillen, MD of HITEC International, which distributes DDS-, Suprema- and iKLAS-branded products, among others. “We expect the overall security market growth to be 20 percent this year, and for our company, growth is expected to be 50 percent.”

“The growth is continuing. Now our group has 60 employees. As I recall last year, we only had 30 to 40. So our business is expanding,” said Ranil “Neil” Reyes, Sales Supervisor for Internet of Things, a distributor of HID Global, Suprema, EntryPass and Nedap, among others.

Growth drivers

The market is growing on the back of a strong economy. According to the World Bank, the country is one of the best-performing economies in Asia and is expected to see a 6.7 percent GDP growth this year as well as next year. The figure is higher than some of its neighbors, for example Malaysia, Indonesia and Thailand, which are expected to register growth of 5.4 percent, 5.2 percent and 4.1 percent this year, respectively.

The growth trend has prompted the government to focus on infrastructure development. In fact, the Philippine government under President Rodrigo Duterte has announced the “Build, Build, Build” program that seeks to modernize the country's infrastructure. According to the Philippine Department of Finance, the program aims to roll out 75 flagship projects worth a combined total of US$36 billion in investments. They will consist of six airports, nine railways, three bus rapid transits, 32 roads and bridges and four seaports that will help bring down the costs of production, improve rural incomes, encourage countryside investments, make the movement of goods and people more efficient and create more jobs, all with the hope of reducing the Philippines' poverty incidence from 21.6 percent today to 14 percent by 2022, the department said.

Indeed, infrastructure development has been cited as a major driver for security. “It's the government infrastructure that's driving the growth. If we have the infrastructure then all the business will follow. When the business follows, all the commercial developments will start to happen. So everything starts with government infrastructure – the highways, the airport, ports, transportation – it starts with the government,” said Matthew Ang, Product Manager at ISR, which distributes Kedacom-branded products.

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