Procter & Gamble (P&G) Philippines President and General Manager Mr. Raffy Fajardo; Cabuyao Plant Manager and Director Ms. Seema Menon; Government Relations Director and Country Legal Head Atty. Mimi Malvar; other executives and staff of P&G Philippines; colleagues in government; distinguished guests; ladies and gentlemen—good morning.
Thank you, P&G Philippines, for inviting me here to your Cabuyao plant to be part of the inauguration of your newest Pampers manufacturing line.
P&G Philippines History
Let me begin by taking this opportunity to celebrate P&G’s presence in the Philippines for over 115 years. P&G Philippines is the company’s first operational unit in the Far East and the second oldest P&G subsidiary outside North America.
Indeed, your company has come a long way. It started operations in the Philippines in 1908 when two American ex-troopers established a partnership named Manila Refining Company. It was called the Philippine Manufacturing Company or PMC when it offered me my first job after college in the 1970s. I worked at your former Tondo plant in Manila for two years: the first year was as the industrial engineer of the Camay and Safeguard Department, and the second year was as the manager of the Dari-Crème, Purico, and Primex Department.
Your merchandise items and consumer brands have become household names for cleaning and personal care products in many Filipino homes. P&G Philippines has a robust portfolio of product brands, notably Safeguard, Tide, Downy, Ariel, Head & Shoulders, Pantene, Oral-B, Olay, and Joy. My family and I use some of them.
With your long stay in the country and the scale of your operations, P&G Philippines has contributed significantly to our country’s economic growth and development. It has been consistently recognized as one of the top taxpayers in the Philippines.
At the same time, you have continued to expand and integrate your Philippine operations with the rest of the world. Your Global Business Services (GBS), established in Manila in 1999, was a pioneer in our BPO-Global Inhouse Center industry. Now, P&G GBS serves one-third of P&G companies worldwide, currently employing 1,600 full-time employees.
We also note the registration of your Regional Operating Headquarters and its endorsement by the BOI in 2011 to support your subsidiaries and affiliates in Asia. You continue to invest in Filipinos, helping them become future leaders. P&G alums like
myself recognize P&G as an excellent training ground for young Filipinos.
For all these, on behalf of President Ferdinand R. Marcos Jr., thanks again to P&G Philippines for your unwavering trust and confidence in the Philippines and the Filipino talent and for your continuing efforts to improve products and processes for Filipino consumers.
LINK between P&G Philippines expansion to economic reforms
Last September, President Marcos and I met with some of your top company officials in the U.S. There, we learned that this newest Pamper manufacturing line we are inaugurating today is P&G Philippines’ biggest of three expansion projects in our country during 2022-2023.
This PHP 864 million investment is the direct outcome of a critical economic reform that the Philippine economic team has pushed for since the previous administration—Republic Act 11534 or the Corporate Recovery and Tax Incentives for Enterprises Act or CREATE.
A couple of weeks before President Marcos visited the United States, with the assistance of our Board of Investments (BOI), P&G Philippines applied for registration as an export producer of the new manufacturing line for Pampers pull-up pants in September 2022 under the CREATE Law.
The diaper products from this new line will eventually be exported and sold to Korea and Vietnam. That is why, among other benefits listed in the CREATE Law, the importation of capital equipment, raw materials, or accessories is exempt from tax and duty.
Sanitary towels, feminine hygiene products, and baby pampers appear to be pandemic-proof, if not pandemic-driven. The export value of these products, which P&G also manufactures, has jumped over six-fold from USD 6 million in 2018 to USD 40 million in 2022. Last year, South Korea was the top export market for these products, followed by Vietnam and Malaysia. As we welcome more investments in producing these products under the CREATE Law, the Philippines may depend less and less on importing such products.
What we are inaugurating today meets most of DTI’s six strategic actions to promote Science, Technology, and Innovation-based Industrial Strategy. This project sustainably upskills and reskills workers; demonstrates the enabling Philippine business environment for investments; contributes to our country’s industrial development, trade, and investment; and promotes regional development through innovation as you grow your plant here in Cabuyao.
From the vantage point of the Philippine government, the new diaper manufacturing line will generate government revenues and create direct and indirect jobs. Moreover, it will link the Philippines to the global value chain for manufacturing and distributing these diapers across Asia.
Like many other countries, the Philippines’ recovery from the pandemic has not been easy. But P&G Philippines’ investment shows that our country’s macroeconomic fundamentals are strong and that our structural reforms are well-crafted and working. These pandemic shock absorbers (so to speak) caused the Philippine economy last year, 2022, to achieve a 7.6% GDP growth, the highest rate in over four decades.
A couple of weeks ago, on 21 February 2023, the Philippine Senate formalized the Philippines’ participation in the Regional Comprehension Economic Partnership (RCEP) when it ratified the mega free trade agreement. As a Philippines-based manufacturer, P&G Philippines can leverage RCEP to enhance its access to the Asia-Pacific regional market, as well as its linkages to the global value chain. RCEP will make some production inputs more accessible, our exports more competitive, and manufacturing in the country less expensive.
Future Collaborations
We in the Marcos administration strive to make the Philippines an upper-middle-income country soon. We plan to develop a sustainable and innovative manufacturing industry. We aspire to become a leading manufacturing hub across Asia.
Our country’s unique location favors upcoming manufacturing projects as it is a critical entry point to over 600 million people in the ASEAN market. The Philippines is at the crossroads of international shipping and airline trade routes. Within Asia, the Philippines is often reachable within 3 to 4 hours by plane.
We will continue to promote strategic partnerships between the government, private sector, academe, and other relevant institutions. This is to provide more targeted interventions to address specific binding constraints of the manufacturing industry.
Again, congratulations on your newest Pampers manufacturing line. Let us make globally competitive and innovative manufacturing happen in the Philippines.
Thank you and mabuhay.*
Date of release: 02 March 2023