Two phases of the planned Philippine Iron and Steel Project in Misamis Oriental amounting to $4.4 billion worth of investments from China are expected to generate over 20,000 job opportunities for Filipinos.
A memorandum of understanding were signed on 13 December between China state-owned steelmaker HBIS Group Co. Ltd., Chinese private equity firm Huili Investment Fund Management Co. Ltd., Steel Asia Manufacturing Firm and PHIVIDEC Industrial Authority for the join implementation of the project.
At $4.4 billion, it is China’s biggest industrial investment to date.
The project will span over 305 hectares inside the PHIVIDEC estate in Mindanao to include facilities related to port operation, sintering, coking, pelletizing, iron-making, steel-making, steel rolling and further processing.
The Mindanao location is identified to be the most strategically-located industrial zone in the country for heavy industries. Construction and ramp-up period are set to span from three to five years.
The first phase of the Philippine Iron and Steel Project will make use of $3 billion to cover the production of 4.5 million tons of hot rolled coil and 600,000 tons of slabs. Steel manufacturing capacity will be increased to 8 million metric tons under the second phase.
On top of the 20,000 job opportunities anticipated, the steel and manufacturing base is also projected to provide around 65,000 indirect job opportunities to related businesses.
According to Department of Trade and Industry (DTI) Secretary Ramon Lopez, the project will open doors for the country’s steel industry by producing basic iron and steel products seen to supply downstream steel products like metal sheets and bars (nails, staple wires and paperclips), as well as construction-grade steel products such as wire rod and wire mesh.
The project also supports the country’s goal of becoming a producer of high-quality and safe steel products by 2030, according to DTI.
Currently, iron and steel only rank fifth in the country’s import by commodity group valued at $4.91 billion from January to October 2018, still a 39.4 percent growth from 2017 figures.
“The project is very important to our industrial development and will allow us (to) pursue President Duterte’s vision of having a globally competitive integrated iron and steel industry, to support the growing economy, to alleviate poverty and to create jobs for every Filipino,” the trade chief said.
Lopez further explained that the project will help reduce the trade deficit by as much as $2.3 billion in Phase 1 and up to $4.4 billion in the succeeding phases as the country will then be producing critical items that it currently imports.
“Boosting the manufacturing sector creates jobs and increases the production capacity to support the growing domestic demand and export requirements. This will also help us reduce trade deficit…and our range of steel-based exports will expand.”
According to the Board of Investments (BoI), the project can reduce the widening trade gap as total domestic and export sales of slabs and hot rolled coils produced from the project would amount to P144.279 billion.
“The project is very important because it truly represents industrial empowerment. With this integrated steelmaking facility, the country will be able to capture, through this and succeeding phases of the project, large part of the value for the manufacture and assembly of appliances, automotive assembly, construction materials, shipbuilding, heavy equipment manufacturing, among others,” Trade Undersecretary and BoI managing head Caferino Rodolfo said.