The Philippines continues to actively attract and support global IT companies and is gaining recognition for its high-level IT education and large pool of talented engineers.

More tech firms will consider expanding their presence in the Philippines to capitalise on the wave of digitisation. One major trend associated with this shift is the attraction of foreign companies.

The Philippines has an opportunity to attract more foreign companies to establish tech hubs in the country that cater to the wider ASEAN region, particularly for software development and engineering talent.

This influx of foreign direct investment into the country’s economy will bolster the government’s agenda. However, we have some suggestions regarding areas of focus for Philippines Inc to expedite this transition.

First, the Philippines must increase access to quality education and training by investing in the development of educational infrastructure and providing targeted training in key areas of technology and entrepreneurship.

This should involve initiatives to collaborate with leading technology firms and educational institutions to offer enhanced educational opportunities and training programs.

Second, it should cultivate an attractive business and investment climate that fosters technology investment and talent development. This includes implementing policies that encourage innovation, reward entrepreneurship, and reduce barriers to entry for tech start-ups.

Third, the Philippines must continue investing in infrastructure, with a particular focus on initiatives that facilitate the development of technology talent, such as high-speed broadband, telecommunications networks, and digital infrastructure.

Fourth, it needs to promote talent mobility by implementing policies that streamline the process for skilled workers (in our case, those from Japan) to migrate to and remain in the country.

This should encompass clear and straightforward immigration policies, as well as visa and work permit regulations that facilitate the stay and employment of talented individuals.

Finally, the country should leverage its strategic location and position itself as a regional hub for technology talent on both the international and regional stages. This can be achieved by launching additional initiatives to attract leading technology firms and talent from other countries, while also showcasing the Philippines’ technological capabilities.

Leveraging the Philippines to support a regional strategy

Japanese tech companies are investing in expanding their presence in the Philippines due to its potential as a tech talent hub that can cater to operations across the region, including markets like Singapore and Thailand.

Currently, we are particularly enthusiastic about the digitalisation of paper-based business processes that are still prevalent in many traditional businesses in Southeast Asia. There is a clear necessity to automate more of these processes while securely storing business data in the cloud.

We anticipate that more Japanese tech firms will rapidly expand the availability of their solutions in countries such as Singapore and Thailand, supported by dedicated on-site developer teams.

To accelerate their global ambitions, Japanese tech firms must increasingly address the requirements of local customers in each country and region. This will necessitate greater investments in multi-language support teams and the development of unique functions in compliance with each country’s laws and regulations, systems, business customs, and workflows.

Embracing an AI-first future

Many Japanese firms are already actively using new generative artificial intelligence (AI) technologies, including ChatGPT, and are exploring ways to expand its application to other products and markets in the future.

The rollout and integration of AI across different regions and solutions necessitate a highly capable tech and developer team, particularly when navigating diverse regulatory jurisdictions, business environments, and languages.

Given Southeast Asia’s significant yet fragmented market, we consider the localisation of tech offerings to be crucial. International companies that establish operations in this region quickly realise the importance of customising the product experience in each market while harnessing the power of AI. As a result, there will be an increased demand for tech talent based in the region in the coming years.

After extensive research, we have concluded that the Philippines provides an ideal tech hub location for international firms and Fortune 500 companies to establish developer centres strategically supporting their regional presence.

We are enthusiastic about the growth potential in this part of the world, and it is worth noting that Japan has a longstanding historical trading partnership with countries like the Philippines and Thailand, dating back centuries, creating natural synergies.

Furthermore, with companies like Apple beginning to shift their supply chains away from China and towards markets such as Vietnam and India, the tech landscape in the region will gradually mature. This shift will lead to an increase in demand for tech talent, benefiting regional economies like the Philippines through enhanced foreign direct investment.