The services sector, which contributes 56.7 percent of the Philippines total GDP growth, will be helped by the country’s hosting of the Asia-Pacific Economic Cooperation (APEC) meetings here according to National Economic and Development Authority.
The agency said the Philippines’ current leadership in the APEC Group on Services can provide a necessary boost to the dynamism of services sector and the attainment of inclusive growth.
“Services is the largest economic sector and is a major employer in most APEC economies, including the Philippines,” said NEDA Deputy Director General Emmanuel Esguerra, who serves as the convenor of the APEC Group on Services (GOS).
For full-year 2014, the NEDA official noted that the sector accounted for 56.7 percent of our country’s gross domestic product and 53.6 percent to total employment. It grew by 6.0 percent and generated 599,000 jobs, the highest among the country’s major sectors.
“This is a manifestation of how big our services sector is. Yet, there are still underlying potentials that must be tapped and developed. The APEC fora provide good venues to pursue these,” he said.
The NEDA said that for the First Senior Officials’ Meeting (SOM1) of the GOS, the Philippines, along with other APEC member economies, aims to enhance current initiatives by building on last year’s developments and focusing on the integration of small and medium enterprises into services global value chains (GVCs).
The agency pointed out many services are being undertaken in the production and sale of a product, whether it is a good or a service.
It explained other sectors such as manufacturing have a number of services embedded in their processes. These include design, quality control, inventory systems, transport, logistics, wholesale/retail, marketing/advertising, repair/maintenance, installation/construction, finance after-sales services.
Firms in the services sector itself also outsource or move their non-core services functions offshore to their affiliates, as they seek to move up the value chain. The services then become value added to the final product, it said.
“This ‘tasking’ in the production process of firms or in the GVCs are where opportunities for SMEs in the services industry reside,” said Esguerra.
For the APEC region, the NEDA noted that total services exports account for 20.27 percent.
However, when viewed through a value-added lens, services share to total exports increases to 39.08 percent.
“Looking at services this way shows us that it has an important role not only in big industries engaged in production but also in our small and medium enterprises. In fact, among APEC economies, the Philippines has the highest GVC participation in electrical and optical equipment,” said Esguerra.
The NEDA official said that these are only among the reasons why the government is keen on enhancing regional cooperation and engaging in partnerships in services.
“In our pursuit of inclusive growth, services open numerous opportunities for employment generation and poverty reduction —goals that we have set in the Updated Philippine Development Plan 2011-2016,” he concluded.