MANILA, Philippines -- The Philippines remains a more lucrative market than Vietnam for software maker SAP in terms of the manufacturing sector, according to regional executive.

In recent years, the manufacturing sector in Vietnam has been boosted by investments from high-tech companies such as Intel, which, on the other hand, is rumored to be scaling down its operations in the Philippines.

Saj Kumar, vice president for discrete manufacturing under SAP's industry solutions in Asia Pacific, however, noted that the Philippines is still years ahead of Vietnam in several factors, among them technology adoption.

"The Philippines has a very strong chance in competing against Vietnam because the latter simply doesn't have a large enough or skilled workforce yet," Kumar said in an interview with INQUIRER.net during the local SAP Summit.

Kumar cited the large pool of IT graduates the country produces each year and also the advantage of having a better English-speaking workforce.

In terms of infrastructure, he also cited very good logistics mentioning in particular the Subic-Clark corridor that acts as a gateway for goods coming to and from the country.

In the Philippines, Kumar estimates around 40 large manufacturing companies using SAP.

"In Vietnam, we are still in the early stages, hence the market is still small. We are targeting primarily US companies that are setting up operations there," Kumar added.

The country's strengths also makes it a viable option for Japanese manufacturers in their "China plus one" strategy.

"A lot of the major Japanese manufacturers are looking for an alternative site outside of China but still within the Asia Pacific region," Kumar said.