Overview of the Environmental Technologies Industry in the Philippines
Overview of the Market for Environmental Technologies Philippines
Summary:
The Philippine environmental technologies export market was estimated to be worth about $546 million in 1997. This figure includes all market segments, including water supply and pollution control, waste management, air pollution control, monitoring and analytical equipment and consulting services. Crisis management remains the motive behind many environmental regulations and most agencies with enforcement duties do not have the budget to carry out regular inspections and record keeping. Despite these limitations, significant opportunities do exist for US envirotech firms in many market segments.
Market:
The demand for clean water has emerged as one of the highest priorities in the Philippines. Today 17 out of 23 municipalities are experiencing intermittent or continuous water shortages. Six years ago the Philippine government turned to privatization of the power industry to help alleviate massive power shortages. The same technique is now being applied to the water crisis.
Privatization is seen as an answer for bringing clean water to citizens. Clean water is considered key to building a strong economy. As a result, the water supply and pollution control segment currently offers the best export opportunities for U.S. envirotech firms. The market for water supply and distribution alone was $251 million in 1997. Wastewater treatment expenditures totaled approximately $100 million in 1997. The Build-Operate-Transfer (BOT) Law of 1994 authorized the privatization of large commercially viable water utilities in urban areas. As a result a number of water-related projects are planned, particularly in the Metro Manila area, which could benefit from U.S. water technology know-how. Among them are the privatization of the Zamboanga City Water District. The Zamboanga plan includes a BOT project to construct a water intake structure, treatment facilities and distribution main for approximately $60 million and an expanded water distribution network for an estimated $30 million to help increase the urban water supply by 2000. Competition is stiff from European firms. U.S. companies might consider pursuing minority equity holdings and bidding on water infrastructure development projects offered by the World Bank, the Asian Development Bank and similar agencies.
The monitoring and analytical equipment market is another very promising segment of the Philippine envirotech market. The total market in 1998 is expected exceeded $100 million. About 70 percent of that amount was devoted to water and wastewater monitoring equipment and about 30 percent to air monitoring equipment. The monitoring equipment market has been growing at a rate of 15 percent annually since the early 1990's as the government strives to improve the country’s deteriorating air and water quality. The best sales prospects in water and wastewater monitoring include buckets, sump pump calibrators, weirs, Parshall flumes and open pipes, among others. The best air monitoring sales prospects include automatic air samplers, gas/vapor samplers, impingement collectors, suction blowers and particulate analyzers.
Good opportunities exist for U.S. waste management companies in national and local government waste collection projects. Equipment imports for solid waste management were about $9.1 million in 1996 and are expected to grow between 60-70 percent over the next few years. Opportunities are more limited in the hazardous waste management segment. Recent regulatory developments are driving the hazardous waste management market but significant growth is not expected until the new regulations are more strictly enforced. The medical waste management market offers better opportunities. More than 90 percent of all medical waste management equipment in the Philippines is currently imported. The medical waste market was $11.5 million in 1997 and is expected to grow 25 percent annually through 1999.
About $10 million was spent onair pollution control equipment in 1997. The U.S. leads all competitors and currently supplies about 30 percent of the Philippine air pollution control market. Unfortunately, new business opportunities in the Philippine air pollution control market are limited due to uneven enforcement of point and mobile source emissions control regulations. The best prospects lie with donor-funded initiatives. The market may pick up if pending legislation, including the new Environment Code bill, is adopted. The Environment Code bill envisions a gradual tightening of emissions standards.
Finally, the 1997 environmental consulting market was estimated at $36 million. The segments most in demand include environmental impact assessments (EIAs) and environmental baseline studies, pollution management appraisals (PMAs), and ISO 14001 and environmental management system program design. According to the Foreign Investments Act the Philippine environmental consulting services market is not wholly open to U.S. companies. Engineering, chemistry, geological and other professional services are restricted to 100 percent Filipino-owned companies. Some U.S. firms have succeeded, however, by establishing local subsidiaries and by providing services to multinational corporations operating in the Philippines.
Overall, prospects for growth remain bright through the year 2000 and beyond. The May 1998 Presidential election produced an administration that seems willing to continue the aggressive market liberalization policies of the Ramos Administration.
