As the focal entity for producing materials used across various sectors, the Philippine chemical industry is grappling with significant challenges.
But despite these setbacks, Department of Trade and Industry (DTI) Secretary Alfredo Pascual emphasized the government’s commitment to fostering the sector’s growth, recognizing its vital role in national development and economic stability.
Valued at approximately PHP 330 billion (USD 5.9 billion), the chemical industry is a substantial part of the Philippine economy. However, its large-scale manufacturing capabilities remain underdeveloped.
The sector lacks extensive facilities for producing advanced chemicals and large-scale equipment and instead focuses on smaller, niche markets. Although progress has been made in producing basic chemicals and certain industrial materials, broader capabilities such as large-scale production facilities and advanced manufacturing technology are still limited.
The industry operates under stringent regulations aimed at mitigating environmental and safety risks. Key legislation includes Republic Act No. 8749, the Philippine Clean Air Act of 1999, which regulates emissions to maintain air quality, and Republic Act No. 6969, the Toxic Substances and Hazardous and Nuclear Wastes Control Act of 1990, which manages the importation, manufacture, and disposal of toxic chemicals and hazardous wastes. Both laws are enforced by the Department of Environment and Natural Resources (DENR) through its Environmental Management Bureau (EMB) to ensure compliance and safeguard public health and the environment.
These regulations are crucial in protecting public health and the environment but also impose significant compliance costs on businesses.
The DTI plays a pivotal role in supporting the chemical sector with focus on adherence to international standards and promoting industry growth. Despite these efforts, local companies face substantial challenges, including outdated infrastructure, high compliance costs and competition from cheaper imported products. These factors hinder the sector’s global competitiveness and its ability to scale up production.
JG Summit Petrochemicals Group and Philippine Associated Smelting and Refining Corporation (PASAR) are two key players in the country’s chemical industry. JG Summit is involved in petrochemical production, while PASAR focuses on copper smelting. The recent shift of Chemical Industries of the Philippines Inc. (ChemPhil) to real estate highlighted the difficulties faced by local chemical companies in maintaining competitiveness.
The industry is also affected by environmental and safety risks. Pollution and hazardous waste management are significant concerns, particularly in densely populated areas. Industrial accidents and compliance with safety standards further complicate operational challenges for chemical manufacturers.
To address these issues, the Philippines relies on international sources for technology and supplies. The sector frequently imports advanced machinery and technology to overcome gaps in local production capabilities. Investments in infrastructure and technology upgrades are likewise essential for the sector to enhance its global competitiveness and address current limitations.
While the Philippine chemical industry is an important economic sector, it faces considerable challenges. Addressing these issues requires strategic investments and reforms to improve infrastructure, technology, and regulatory compliance.
The future of the industry hinges on overcoming these obstacles and strengthening its position in the global market.
