The Philippine chemicals industry aims to engage in transforming the nation’s basic resources into a wide range of higher value products that serve domestic as well as global market needs with the best customer value. It is committed to attracting, developing and retaining the best talents who will be at the forefront of product and process innovations while adhering to sustainability and Responsible Care principles. By relentlessly improving products and processes, it will achieve sustainable growth and thus, contribute to the nation’s inclusive growth and socio-economic development.
The industry has agreed to pursue its vision that emphasizes the following goals: (1) the creation of a wide range of products with the best customer value; (2) satisfying domestic demand and becoming a leading contributor to the Philippine export basket; (3) promotion of a high level of workforce productivity; (4) becoming innovative, both in products and processes; (5) developing and managing the industry sustainably to protect the natural assets on which the industry depends; and (6) becoming competitive as an industry so as to provide benefits to the Philippine economy and to the Filipino people.
The industry envisions itself as a major player in the region by 2016. By 2022, it should have established itself as a leading exporter, and it should have developed a strong foothold in the global market by 2030.
To realize these targets, the industry seeks to implement a triple gear recommendation with the following pillars: (a) creation of Engineering and Science Advanced Technology Program (EnSAT) to develop the technical and scientific skill of Filipinos, (b) setting legislative policies that are based on sound technical and scientific studies that take into account the total system in which the chemical industry operates, and (c) establishment of the chemical industry cluster to enable cost-efficiency in production of chemical products. The government is considered as the major stakeholder in the three gears, where it serves the role as the enabling mechanism that will allow for smooth implementation of the recommended programs.
The chemicals industry is a highly diverse industry that covers raw materials, such as oil, water, air, and minerals, which are converted into a wide array of substances for use by other chemical companies, producers in other industries, and other consumers. It has extensive links with other industries, including agriculture/agribusiness, automotive, cement, creative, construction, energy, fishing, health, housing, and pharmaceuticals industries.
With the global chemicals industry earning an output of US$4.12 trillion in 2010, the Philippine chemicals industry positions itself to contribute to the growing needs of the world economy. The Samahan sa Pilipinas ng mga Industriyang Kimika(SPIK, or the Chemical Industries Association of the Philippines) aims to further develop the industry in the next seventeen years, giving priority to the following sub-sectors: Oleochemicals, Petrochemicals, Inorganic Chemicals, Agrochemicals and Fertilizers, Consumer Care Products, and Chemicals Research and Development.
The prospects are bright for the chemicals industry. One of the primary advantages of investing in the Philippines is its young population. With a median age of 23 years old and a population of 92.3 million, the demographic characteristics of the Philippines point to a large domestic market and a strong manpower base. This young population is also increasingly spending on health and housing needs. More importantly, Filipinos are open to consume organic-based herbal medicines and consumer products. This consumption behavior provides a promising market base for pharmaceutical, personal care, cleaning substances, coatings and other chemicals businesses. Likewise, the amount of natural resources in the country provides an abundant yet cheap source of raw materials. These raw materials can be processed to produce valuable chemicals such as lauric acid.
Given the potential for developing coconut-based chemicals and other oleochemical products in the country, SPIK aims to promote research and development through inter-firm collaboration. In support of the innovative capacity of the industry’s small and medium-scale enterprises, SPIK aims to facilitate technology transfer between them and large-scale companies,especially for consumer care chemicals. Finally, SPIK seeks to strengthen its sustainability and environmental care practices by increasing their members’ compliance to the Responsible CareTM global initiative by 75%.
In line with industry efforts, the Philippine government is improving its research support for the different chemical subsectors. The Department of Science and Technology’s (DOST) current research and development programs on chemical products, through the initiatives of the Industrial Technology Development Institute (ITDI) and Philippine Council for Industry, Energy and Emerging Technology Research and Development (PCIEERD), are more open for partnerships with private organizations, particularly proposals for joint research projects with the private sector.
Facts and Figures
- The 3rd Largest Manufacturing Sub-sector with revenues reaching PHP 330 billion in 2009
- The combined chemical imports and the domestic production of the chemical industry is approximately US$ 14 billion, equivalent to 6.7% of Philippine GDP
- Rapidly growing chemical trade imports growing 13% per annum and exports at 17% per annum
- There are 1,400 registered chemical manufacturing firms employing more than 93,000 personnel directly. Domestic production of chemicals, chemical products, plastic and rubber products have been growing an average of 7% per annum in terms of revenues.
- Active dialogue between the government’s Board of Investments, Environmental Management Bureau and the industry ensures effective coordination in areas of environment, health, safety, investment, and long term sustainable growth.
- There are 32,000 chemical professionals and over 360,000 engineering students enrolled every year, with 60,000 graduates.
- There are 33 universities and colleges offering Chemical Engineering and 50 school offering chemistry education in the Philippines. The Philippine chemical industry consists of two major industries under the manufacturing sector: (1) chemical and chemical products; and (2) rubber and plastics products.
- Represented by the Samahan sa Pilipinas ng mga Industryang Kimika (SPIK) or the Chemical Industry Association of the Philippines with 69 company members representing the different chemical sub-sectors namely: agrochemicals and fertilizers; coatings, ink and adhesives; industrial gases; inorganic chemicals; oleochemicals and surfactants; plastic products; petrochemicals; petroleum; specialty chemicals; chemical traders and distributors; chemical storage and transport logistics; and chemical disposal and recycling.
The manufacture of chemicals is among the preferred activities in the IPP.
This covers the production of Oleochemicals, Petrochemicals and derivatives, and Chlor-Alkali Plants products, research & development, and research/testing laboratories.
(1) Oleochemical Products, including the manufacture of fatty acid and fatty alcohol.
(2) Petrochemical products and its derivatives, including, but are not limited to, the manufacture of derivatives from ethylene such as ethylene dichloride (EDC) and vinyl chloride monomer (VCM); olefins and polyolefins [Polyethylene (PE), Polypropylene (PP), Polystyrene (PS), and Polyvinyl Chloride (PVC)], derivatives from propylene, derivatives from mixed C4, and aromatic derivatives.
(3) Chlor-Alkali Plant Products including the manufacture of chlorine, alkali (caustic soda), and hydrochloric acid (muriatic acid).
BPS Product Certification Scheme
The certification of chemical products is guided by the Philippine Standard (PS) Quality and/or Safety Certification Mark Scheme.
Industry Development Program
The Technical Working Group (TWG) for the Chemicals Industry Cluster serves as the coordinating mechanism through which industry concerns are addressed. The TWG is organized into four action tasks, namely:
- FOR TRADE & INVESTMENT MATTERS – covering issues regarding industry clustering, tariff concerns, smuggling, and trade and investment promotions;
- FOR TALENT DEVELOPMENT & INNOVATION – covering issues on skills development and introduction of innovation and process;
- FOR EASE OF DOING BUSINESS – covering issues on assistance that the government could provide the industry as regards streamlining the permit and documentary requirements which overlaps among various agencies; and
- FOR ENVIRONMENTAL PRACTICES – covering issues on plastic banning, life cycle assessment (LCA) and the use of the same as basis of scientific and technological studies in crafting laws that would affect the industries.
Among the TWGs activities are the following:
- Ease of Doing Business. With the release by the DENR of EMB MC 2014-003 (or the Supplemental Guidelines for DENR AO 2007-23, prescribing additional requirements for the issuance of the priority chemical list (PCL)), the TWG was able to obtain a PCL exemption for the industry. In addition, a series of workshops for Ease of Doing Business from January to February 2015 was conducted to come up with a roadmap to streamline the processes of issuance of permits and licenses by various regulatory agencies for the chemicals industry.
- Human Resource Development. TESDA and SPIK conducted a workshop in consultation with the various chemicals industry associations in October 2014 to come up with Training Regulations for a) plant process operators and b) QA/QC laboratory technicians. These training regulations are currently being reviewed by TESDA. After finalizing the training regulations, TESDA and SPIK shall proceed to work on the Assessment Tools for the skills identified.
- Life Cycle Analysis (LCA) for Plastic Packaging. In view of the increasing number of LGU’s banning the use of plastics, the conduct of LCA on plastics has become a priority. This is also pursuant to R.A. 9003’s mandate for DTI to come up with a non-environmentally acceptable products (NEAP) list. In December 2014, the initial results of the LCA Study were presented by the Chairman of the Plastics Industry TWG. The LCA Consultant from DLSU presented to the group his simulation results.
- JGSOC Naphtha Cracker. The JG Summit Olefins Corporation (JGSOC) confirmed that the first Naphtha Cracker Plant in the Philippines started its commercial operations on November 1, 2014. Currently, the downstream polymer plants of JG Summit Petrochemical Corporation (JGSPC) are already using polymer-grade ethylene and propylene manufactured from the JGSOC Naphtha Cracker Plant to produce polyethylene (PE) and polypropylene (PP) resins, for sale to both domestic and export markets. JGSOC also started to export pyrolysis gasoline (pygas).
- Greening the Industry Roadmaps. In the 2nd Scoping Mission for Greening the Industry Roadmaps project conducted by GIZ, the Plastics Industry was identified as one of the priority sectors. Following this, BOI and PPIA collaborated in conducting a workshop on ISO 14000-Environmental Management and ISO 50001-Energy Management System Standard for PPIA-member companies in February 2015.
- Reverse Trade Agreement. Pacific Paint (Boysen) Philippines, Inc. has entered into an MOU with SHDA on September 26, 2014. BOYSEN would be supplying SHDA with white latex paint for their housing projects. There have been similar negotiations between SHDA and two (2) other paint companies (Davies Paints Philippines, Inc. and Campbridge Paint, Inc.).
- Product Standards for Paints. In 2014, the BPS-TC on Paints re-convened and agreed that the priority products would include Semi-gloss Latex, Gloss Enamel, and Alkyd Metal Primer Products. The product standard for Semi-gloss latex topcoat for white and light tints was finalized.
- Comprehensive Tariff Review. A Comprehensive Tariff Review (Line-by-line tariff review) for the chemicals industry was conducted, in preparation for ongoing and future FTA negotiations. The Chapters reviewed include Chapters 28, 29, 31, 32, 33, 34, 35, 36, 37, and 38. Chapter 39 remains under review, with the PPIA and APMP finalizing their position papers.
- ASEAN-Japan Chemical Safety Database (AJCSD) Seminar. The AJCSD’s objective is to come up with a database of all regulated chemicals in ASEAN and Japan, as well as share chemical regulatory information among ASEAN countries. A mini-seminar on the AJCSD Project was facilitated by experts from the Japan Ministry of Economy, Trade, and Industry (METI) and the National Institute of Technology and Evaluation (NITE). The TWG, regulatory government agencies, and the private sector have also agreed to establish a national database containing the regulations for Philippine chemical products. BOI is currently coordinating with PEZA to assess the feasibility of using their Chemical Importation Tool (CIT) database facility for this purpose.
Samahan sa Pilipinas ng mga Industriyang Kimika (SPIK)
Unit 2201 Cityland 10 Tower I,
6815 Ayala Avenue North 1226,
Makati City, Philippines
Tel. No: (632) 753-1752
Telefax: (632) 814-0970
Board of Investments (BOI)
Industry and Investments Building,
385 Senator Gil Puyat Ave,
Makati City Philippines
Tel. No.: (632) 890-9329
Email: [email protected]