The Department of Trade and Industry (DTI) revealed at a manufacturing summit on Monday the government’s new industrial strategy that focuses on industries where the Philippines has existing and potential comparative advantage to generate employment and promote entrepreneurship.
Speaking at the Manufacturing Summit 2016 on Monday, DTI Secretary Ramon Lopez emphasized that the new strategy focuses on the top five industry priorities include manufacturing, agribusiness, information technology-business process management (IT-BPM), tourism and infrastructure and logistics.
“This industrial strategy is the best way to uplift the lives of Filipinos toward the goal of sustainable inclusive growth and shared prosperity for all. This is needed not only to generate jobs and reduce poverty but also to take advantage of market opportunities,” Lopez said.
He added that these five sectors will be the linchpin of the new industrial strategy to create globally competitive, value adding, innovative and inclusive enterprises.
Citing the country’s positive economic outlook as the fastest growing economy in Asia with a sustained strong macro-economic position at 7.1 percent recorded growth in the third quarter of 2016, Lopez said that the Philippines outpaced other countries like China (6.7 percent) and Vietnam (6.4 percent) and fared above average with a consensus forecast of 6.8 percent.
He also said that the manufacturing sector can provide jobs to workers from the low-skilled, medium-skilled and the highly skilled. He also emphasized the need to shift from traditional agriculture to more modern agribusinesses, as well as the relevance today of tourism as source of income and jobs.
The new industrial strategy is DTI’s key response to sustain today’s high level growth, while addressing the issue of unemployment, where the bulk is in in those ranging from 15 to 24 years old, 61 percent of whom are male and 40 percent have high school education, while 36 percent have college education.
“Given these characteristics of our workforce, our industrial strategy focuses on labor intensive industries such as food and resource-based manufacturing, tourism, garments and construction,” said Lopez, adding that it will also focus on high-tech industries like electronics, aerospace, automotive and chemicals.
Consistent with DTI’s Trabaho at Negosyo agenda, the strategy also focuses on strengthening linkages between micro, small and medium enterprises (MSMEs) and large domestic and multinational enterprises to make growth more inclusive.
Meanwhile, Lopez also called on stakeholders to take advantage of preferential free trade agreements, where the country may benefit.
“Huge export markets could be tapped in the Asean Economic Community with a population of over 600 million, and as we forge the Regional Comprehensive Economic Partnership [RCEP], this will grow further to over three billion people representing 45 percent of the world’s population,” he added.
Taking into account external factors such as the economic slowdown in he US, Japan, Europe and China, opportunities from participating in global value chains and emerging new business models, Lopez also said that the current strategy would require “climbing the industrial ladder and moving into higher value added activities” in specific sectors.
These sectors include electronic manufacturing services, semiconductor manufacturing services, auto manufacturing, aerospace, chemicals, furniture, garments, shipbuilding, food and resource-based processing and IT-BPM.
“As an enabler, the government pursues an industrial policy strengthening our industrial base and removing the most binding constraints, but to be strategic, we are focusing our efforts by identifying and prioritizing the most binding constraints,” Lopez explained.
The summit participants, composed of representatives from the private and the public sector, labor, civil society, the academe and some international development partners, were divided into groups to identify such constraints, formulate recommendations to address them and determine the most appropriate intervention strategy.
Lopez called on the participants to ensure that the recommended policy measures bring “the most significant impacts on and benefits for the development of globally competitive, value adding, innovative and inclusive manufacturing linked with agriculture and services industries.”