Philippines: Environment-Friendly Building Products (03/07)

By: Bebe Montesines

Commercial Specialist

U.S. Embassy, Manila, Philippines --- Your global business partner.
800-USA-TRADE

**Summary**

A market for environment-friendly building products is emerging in the
Philippines. Very few environment-friendly building products are
presently available in the country, thus U.S. firms can reap tremendous
benefits by being early entrants. Best prospects include products and
systems designed to improve energy efficiency and promote water
conservation. Generally, products and systems that are
environment-friendly, and can also improve a company's bottom line, will
have good prospects in the Philippines. It is best for a U.S. supplier
of environment-friendly building products to appoint a Philippine
distributor who will market the product by stressing the advantages of
using the product and how the product can support the buyer's objectives
and programs.

**Market Demand**

The Philippine market for environment-friendly building products is in
its infancy stage. Government programs to promote the use of
environment-friendly building products are not yet in place. There are
some efforts by the government, e.g., recognizing energy-efficient
companies and providing a credit facility that can be used to finance
energy-efficiency projects, such as fuel switching from generator sets
to biomass, retrofitting of lighting fixtures, etc., but these cover
limited elements of a building only. The country does not have an
accepted benchmark for the design, construction, and operation of high
performance green buildings. Most building products sold in the market
do have any label that shows whether they are environment-friendly or
not.

Despite the present condition, a growing number of players in the
construction sector are actively discussing the advantages of using
environment-friendly building products. There are some architects,
developers and building owners who have used these products in their
projects. A major Philippine developer has expressed interest to go
through the LEED (Leadership in Energy and Environmental Design)
certification process. LEED is the U.S. accepted benchmark for design,
construction and operation of high performance green buildings. The most
recent development towards the promotion of environment-friendly
building products is the organization of the Philippine Green Building
Council (PGBC). The PGBC, which was formed in the last

quarter of 2006, aims to "to have a single voice in the promotion of
holistic green building practices, to promote market-based green
building practices, to have a non-partisan venue for the development of
a green building rating system, and to facilitate the sharing of green
building information and practices in the building industry.

"This is an excellent time to introduce environment-friendly building
products to the Philippines, as the market is in its emerging stage and
U.S. firms can reap tremendous benefits by being early entrants. The
demand for environment-friendly building products in the Philippines
still needs to be developed but since the initial seeds have been
planted and the prospects for the Philippine real estate/construction
sector are bullish, the Philippines offers opportunities on the use of
these products in ongoing/upcoming building projects. The Philippine
real estate/construction sector is on the upswing and its expansion is
largely fuelled by:

\(1\) Increasing demand for residential real estate properties - Due to
the present low interest rate regime, there is a strong housing demand
not only from people residing in the country but also from Filipinos
working abroad or residing in foreign countries. There are at least 10
million Filipinos who are either working or permanently residing abroad.
A growing number of these Filipinos are looking at real estate
properties in the Philippines for their extended families, as an
investment or as future retirement residence. Their requirements vary,
from low-end single detached units to high-end, high rise residential
condominium units.

\(2\) Booming call centers/business processing outsourcing (BPO)
industry - The influx of BPO firms (Convergys, eTelecare, Teletech, IBM,
Dell, Ericcson Communication, etc.) is creating exponential demand for
office spaces. In 2006, the estimated number of BPO employees stood at
245,000. This year, BPOs are expected to have a total of 343,000
employees. Ayala Land, Robinsons Land, Federal Land, Filinvest Land, SM
Investments Corporation and Megaworld Corporation are among the
Philippine developers that are constructing buildings for BPOs.

\(3\) Growing shopping mall/retail outlet development - Ayala Land,
Megaworld Corporation, Robinsons Land and SM Investments Corporation are
some companies that will continue constructing shopping malls and retail
outlets in response to the Filipinos' propensity to go to these places.

\(4\) Strong public sector infrastructure spending - The Philippine
government plans to undertake more infrastructure projects, including
national roads, farm-to-market roads, ports, bridges, and facilities for
rollon, roll-off. These projects will often be undertaken using funding
assistance from multilateral and bilateral agencies. Because of the
bullish construction/real estate outlook, demand for both imported and
locally manufactured building products is expected to rise. Imports of
building products are projected to grow at least 5% per year in the next
two years. The following will boost demand for environment-friendly
building products:

\(1\) Economic Value -- This means:

\- Savings by using environment-friendly building products - These
savings may come from

improvement in energy efficiency, water conservation and reduction of
operation disruptions.

\- Marketing advantages - The Filipinos working or residing abroad and
foreign investors are

accustomed to international quality and standards as well as
environment-friendly products. They are expected to seek these in
Philippine properties, thus developers and building owners are

contemplating using or starting to use environment-friendly building
products in their real estate

properties to attract more tenants and investors.

\(2\) Company's mission/vision -- There are Philippine companies that
have incorporated their concern for the environment in their company's
mission/vision. Industry sources indicate that the construction sector
is not familiar with many of the environment-friendly building products
available worldwide. Or, if they know about some products, they may not
be available locally. Thus, architects hesitate to specify them. There
is also the general notion that environment-friendly building products
are more expensive than the regular building products. Among the
environment-friendly building products/systems used in Philippine
buildings or building units are

carpets incorporating the U.S. Green Seal Standard for content and
low-emitting materials; energy saving lamps; waterless urinals;
non-toxic, natural, low VOC (volatile organic compound) paint; chiller
loop systems; variable speed drives; electronic ballasts; skylights; and
solar panels.

**Market Data**

Since the market for environment-friendly building products is still at
the infancy stage and Philippine data does not segregate
environment-friendly building products from non-environment-friendly
products, Philippine statistics on domestic production, exports, imports
and market size are not available.

**Best Prospects**

Best prospects include products and systems designed to improve energy
efficiency and promote water conservation because of high utility costs.
Generally, products and systems which are environment-friendly and can
improve a company's bottom line, will have good prospects in the
Philippines.Let us help you export. export.gov

The U.S. Commercial Service --- Your global business partner.
800-USA-TRADE

**Key Suppliers**

Information on key suppliers is not readily available. However, it
should be noted that a number of U.S. suppliers of environment-friendly
building products are represented in the Philippines. Companies that
exhibit at GreenBuild, a U.S. trade show that features
environment-friendly building products, and are represented in the
Philippines include: Andersen, Certainteed, Duro-Last, Johns Manville,
Kohler, Owens Corning, Tate and Tyco.

**Prospective Buyers**

The prospective buyers of environment-friendly building products in the
Philippines are:

\(1\) Developers/Building Owners attracting BPOs and Filipinos working
or living abroad to rent/buy real estate properties.

\(2\) Companies that are seeking products and technologies that will
reduce their utility costs

\(3\) Companies that have included the care for the environment in their
corporate social responsibility.

**Market Entry**

Special licenses or approvals are not needed in order to sell
environment-friendly building products in the Philippines. It is best
for U.S. suppliers of environment-friendly building products who are
interested in the Philippine market to appoint an agent/distributor. The
agent/distributor develops relationships with potential buyers as well
as monitors projects. He should be able to introduce green building
concepts and benefits to architects and developers. He should be able to
market the product by stressing how it can support the company's
objectives and programs. The products can be offered as a solution to a
problem, e.g., rising cost of utilities. The agent/distributor must be
able to explain how the upfront cost can be recouped and how the
products can result to savings in the long-run.

U.S. firms seeking agents or distributors in the Philippines are
encouraged to use the services of the U.S. Commercial Service, Manila,
especially the International Partner Search (IPS), the International
Company Profile (ICP), and the \"Gold Key Service" (GKS). For more
information about these services, visit http://ww.buyusa.gov/philippines
and click on \"Services for U.S. Exporters\". Once an agent/distributor
has been appointed, the U.S. company should develop the relationship by
providing product literature, training its staff, and supporting
promotional activities, including participation in exhibitions,
advertisement in the yellow pages and other appropriate media, and
sponsorship of building/construction/real estate associations' events
\-- from seminars to golf tournaments.

**Market Issues & Obstacles**

There are no major market issues and obstacles in exporting
environment-friendly building products to the Philippines. Tariff duty
on building products ranges from 1-15%.

**Trade Events**

U.S. Green Building Products Trade Mission to Asia; June 6-8, 2007
(Philippine Stop);

http://www.buyusa.gov/downtownlosangeles/greenbuild_asia.html;
Amy.Magat@mail.doc.gov

Philconstruct 2007(17th Philippine International Construction Equipment
and Building Materials Exhibition), November 15-18, 2007, World Trade
Center Metro Manila, Roxas Blvd., Pasay City,

http://www.globallinkph.com; <jing.lagandaon@globallinkph.com>.Let us
help you export. export.gov

The U.S. Commercial Service --- Your global business partner.
800-USA-TRADE

Worldbex 2008 (The 13th Philippine World Building and Construction
Exposition); March 12-16, 2008; World Trade Center Metro Manila, Roxas
Blvd., Pasay City; http://www.worldbex.com; <info@worldbex.com>

**Resources & Key Contacts**

Philippine Green Building Council,
[http://greenbuilding-]()philippines.blogspot.com/2007/01/philippine-property-andconstruction.html;
philgbc@gmail.com

United Architects of the Philippines -- Green Architecture Movement,
United Architects of the Philippines, www.united-architects.org;
<uapnational@yahoo.com/edgareformado@yahoo.com>

**For More Information**

The U.S. Commercial Service in Manila, Philippines can be contacted via
e-mail at:

Bebe.Montesines@mail.doc.gov; Phone: (632) 888-6077; Fax: (632) 888-6606
or visit our website:
[www.buyusa.gov/philippines](http://www.buyusa.gov/philippines).

**The U.S. Commercial Service --- Your Global Business Partner**

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*Disclaimer: The information provided in this report is intended to be
of assistance to U.S. exporters. While we make every effort to ensure
its accuracy, neither the United States government nor any of its
employees make any representation as to the accuracy or completeness of
information in this or any other United States government document.
Readers are advised to independently verify any information prior to
reliance thereon. The information provided in this report does not
constitute legal advice. International copyright, U.S. Department of
Commerce, 2007. All rights reserved outside of the United States.*