Why Taiwanese Electronics Manufacturers Are Expanding in the Philippines

Taiwan makes a large share of the world’s electronics, and its manufacturers are spreading production across more countries than they used to. The Philippines is increasingly on that list. This article explains why, what the numbers actually show, and what a Taiwanese manufacturer needs to settle before setting up here.

A Quick Reality Check: Expansion, Not a Mass Exodus

Headlines often say Taiwanese manufacturers are “moving” to the Philippines. The more accurate picture is diversification. Many Taiwanese electronics makers are adding capacity in new locations while keeping their core operations, rather than relocating wholesale.

The scale of that diversification is visible in Taiwan’s own investment data. According to Taiwan’s Ministry of Economic Affairs, China accounted for 83.8 percent of Taiwan’s approved outward investment in 2010, but 12.9 percent over 2021 to 2025, and just 0.9 percent in the first five months of 2026. ASEAN members took about 20 percent of approved outbound investment over 2021 to 2025, and electronic parts and components were the largest contributor to the growth in ASEAN investment.

The Philippines is one destination among several. In 2024, the Department of Investment Review named Singapore, Vietnam and Malaysia as the main destinations for Taiwanese investment under the New Southbound Policy. The Philippines was not named among the main destinations, which is part of why the Philippine Economic Zone Authority (PEZA) has been actively courting Taiwanese firms.

Reason 1: The Philippines Already Runs on Electronics

Electronics is the backbone of Philippine manufacturing exports. In 2025, electronic products generated US$45.89 billion, or 54.3 percent of the country’s US$84.41 billion in merchandise exports, according to the Philippine Statistics Authority. In an October 2025 interview with CNA, PEZA Director General Tereso Panga said Taiwanese companies in PEZA ecozones have been profitable because the Philippines can supply a skilled workforce with high English proficiency, and he pointed to the country’s strategic location and policy environment as reasons the ecozones are a reliable partner for Taiwan amid global supply chain realignment.

Taiwanese companies are already well represented in PEZA ecozones, and PEZA says they have generated investment, export earnings and jobs for the Philippines. Kinpo Electronics, Tong Hsing Electronics, Acbel Polytech and Sunon are among the Taiwanese names registered with PEZA. In September 2025, PEZA said in a statement that Taiwan ranked eighth among its top investor countries, with investments in semiconductors and electronics, information technology, fabricated metals, rubber, plastics and paper products.

Reason 2: Supply Chain Risk Is Pushing Companies to Diversify

Taiwan’s Ministry of Economic Affairs (MOEA) attributes the shift in Taiwanese outbound investment to companies localizing production to serve customers more closely and diversifying their manufacturing bases to reduce dependence on any single market. In its July 2026 statistics report, the ministry linked this to global supply chain restructuring driven by the COVID-19 pandemic, US-China trade tensions and geopolitical uncertainty, together with rising demand for Taiwan’s electronics and ICT products. PEZA’s director general has also said that Taiwan’s semiconductor and electronics supply-chain clusters fit the labor and location advantages the Philippines can offer.

Taiwan’s own policy points the same direction. Its New Southbound Policy, introduced in 2016, is designed to build broad links with Southeast Asia, South Asia, Australia and New Zealand, spanning trade, technology, education, culture and tourism. PEZA describes the Philippines as emerging as a solid priority partner under that policy.

Reason 3: A More Competitive Incentive Package

Philippine tax incentives are a practical reason for exporters to take a closer look. Republic Act No. 12066, known as the CREATE MORE Act, was approved on November 8, 2024 and amends the earlier CREATE Act (RA 11534). For export manufacturers, the benefits generally include:

•       Income tax options. Registered export enterprises may choose between a special corporate income tax rate applied to gross income and an enhanced deductions regime.

•       Lower rate under enhanced deductions. Under the enhanced deductions regime, qualified enterprises pay a reduced income tax rate and may claim additional deductions.

•       VAT relief for exporters. Registered export enterprises may enjoy VAT exemption on imports and zero-rating on local purchases directly attributable to their registered activity, subject to conditions such as export performance.

•       Simpler local taxes. Local governments may impose a single local tax on registered enterprises in place of other local taxes, fees and charges during certain incentive periods.

These incentives are not automatic, and the specific rates, conditions and incentive periods are set by the law and its implementing rules. They depend on registration with an investment promotion agency such as PEZA, on the registered activity, and on continuing compliance with the law’s conditions.

Reason 4: Active Government Courtship

Philippine agencies have been going to Taiwanese manufacturers directly. In 2025, PEZA and the Philippine Trade and Investment Center in Taipei held an investment mission and forum that drew around 100 representatives from Taiwan, with investors expressing interest in semiconductors, electronics, industrial estates and consumer goods. PEZA said a Taiwan-based consumer electronics manufacturer was preparing a one-hectare site in Batangas for an investment of US$5 to 6 million, expected to create around 300 jobs, and that a maker of surface acoustic wave and bulk acoustic wave devices was advancing its registration to transfer additional capacity to the Philippines.

PEZA has continued these efforts. In February 2026 it held a Taiwan Investment Forum in Taipei with Ayala Land Logistics Holdings Corp., which drew more than 70 investors. For a first-time investor, this kind of coordination means ecozone sites, registration support and incentive guidance can be arranged through a smaller number of conversations.

What Taiwanese Manufacturers Still Weigh Carefully

A balanced decision looks at the trade-offs as well:

•       Competing destinations. Singapore, Vietnam and Malaysia have been leading destinations for Taiwanese investment in ASEAN, and each has its own incentive regime.

•       Cost and infrastructure. Power costs, site availability and logistics vary by ecozone and region, and should be compared site by site.

•       Trade policy. US tariff rules affecting electronics have been changing through 2026. Manufacturers should check how the rules apply to their specific product classifications and destination markets before committing.

•       Incentive conditions. The CREATE MORE benefits come with eligibility requirements, performance conditions and reporting obligations.

What Setting Up Looks Like in Practice

A Taiwanese manufacturer entering the Philippines typically works through these steps:

1.    Choose the entity structure. A common route is to incorporate a Philippine subsidiary with the Securities and Exchange Commission, though other structures exist depending on the activity.

2.    Select a location. Options include PEZA ecozones, other investment promotion agency zones and private industrial estates.

3.    Register for incentives. Apply to PEZA, or another investment promotion agency, for registration of the export activity.

4.    Complete tax and local registrations. This includes the Bureau of Internal Revenue, local government permits and employer registrations.

5.    Set up accounting and compliance. Registered enterprises must keep proper books and meet reporting requirements to keep their incentives.

How Starlight Can Help

Setting up a manufacturing operation involves entity registration, incentive applications, tax registration, permits, bookkeeping and ongoing compliance. Starlight Business Consulting Services, Inc. helps foreign and local businesses handle these requirements so owners can focus on operations. If your company is considering the Philippines, contact Starlight to discuss the structure and registration route that fits your plans.

Frequently Asked Questions

Are Taiwanese electronics manufacturers leaving China for the Philippines? Many are diversifying rather than leaving. Taiwan’s approved outward investment has shifted away from China over the past decade, and the Philippines is one of several Southeast Asian destinations.

What incentives can an export-oriented manufacturer get in the Philippines? Under the CREATE MORE Act, registered export enterprises may choose between a special corporate income tax rate and an enhanced deductions regime, and may also enjoy VAT relief on imports and qualified local purchases, subject to conditions.

Do foreign manufacturers need to register with PEZA? Not necessarily. Incentives are granted through registration with an investment promotion agency such as PEZA, and the right agency depends on the activity and location.

This article is for general information and is not legal or tax advice. Statements attributed to government agencies and officials reflect their public statements as of the dates indicated and have not been independently verified by Starlight, and figures reflect official releases and reports available as of November 2026. Requirements and incentives change, so confirm current rules with the relevant agency or a qualified professional before making decisions.