Korea breaks ground for farm machine plant in Philippines

Philippine President Ferdinand Marcos, second from right, and Kim Jung-wook, third from left, director-general for agricultural innovation policy at Korea’s Ministry of Agriculture, Food and Rural Affairs, attend a groundbreaking ceremony for a new industrial complex for Korean agricultural machinery companies in Cabanatuan, Philippines, Wednesday (local time). Courtesy of Ministry of Agriculture, Food and Rural Affairs

An industrial complex for Korean agricultural machinery manufacturers broke ground in the Philippines on Wednesday (local time), in a ceremony attended by Philippine President Ferdinand Marcos, the country’s agriculture secretary and representatives from the Korean government.

The facility, scheduled for completion by 2034, follows the Philippines’ request for support from Korean agricultural machinery makers to help modernize its underdeveloped farming sector. Under the agreement, Korean companies also expect to expand their export foothold in the major Southeast Asian market.

The groundbreaking ceremony took place in the city of Cabanatuan, with Marcos joined by Agriculture Secretary Francisco Laurel and several Filipino lawmakers. From the Korean side, Kim Jung-wook, director-general for agricultural innovation policy at the Ministry of Agriculture, Food and Rural Affairs, Korean Ambassador to the Philippines Lee Sang-hwa and the board chairman of the Korea Agricultural Machinery Industry Cooperative (KAMICO) also attended.

KAMICO is investing in the development of the complex on a 200,000-square-meter site, while the Philippine government has agreed to provide incentives for cooperative member companies that will operate there. These include a 75-year land use permit, infrastructure support such as electricity and water and exemptions from Philippine tariffs and provincial taxes.

Southeast Asia has been a relatively small export market for Korean agricultural machinery manufacturers, accounting for just 4.3 percent of the sector’s total exports last year. However, the Korean government expects the regional market to grow, noting that exports of Korean farm machinery to Southeast Asia rose from $37 million in 2022 to $52 million in 2023. The Philippines is the largest importer in the region, taking up 60 percent of the market.

With the new complex in Cabanatuan, the Korean government aims to diversify export destinations for Korean agricultural machinery, which have long been concentrated in the United States and Canada. North America accounted for 73 percent of Korea’s global farm machinery exports last year.

Korean farm machinery exports this year rose 8.6 percent from a year earlier, reaching $11 billion as of October. The government said the improved performance came despite higher U.S. tariffs and rising logistics costs.

“This project will be a great boon for both countries, further developing local agriculture and farming machinery industries. Through the upcoming complex, the Korean ministry will support the Philippine government and Korean companies seeking to enter the Philippine market,” Kim said.

During the event, Kim also asked Philippine government officials to support Korean companies through business-friendly policies.