This was the theme of the 2nd Business and Economic Briefing on Shipping and the Philippines convened by the Döhle Group last November 14. The array of prominent speakers led by Dr. Bernardo Villegas of the University of Asia and the Pacific (UA&P) offered incisive assessments of the economic prospects for the Philippines in general. Dr. Villegas humbly conceded it is for the sectoral experts present at the event to discern how such prospects impact on the Philippine maritime industry.
Not one to profess maritime expertise, I nevertheless dare to draw conclusions on the information provided by Dr. Villegas, Ms. Amparo Fabe, Security Specialist and Business Intelligence Specialist, and Ms. Annette Suhrbier, Sales Director Döhle Group at Peter Döhle Schiffahrts-KG.
Last week, I mentioned the stream of opportunities and the competition that the Philippines could expect from the establishment of the Asean Economic Community (AEC). Dr. Villegas’ statement that the AEC is assuming growth leadership together with India and Sri Lanka means that this is an auspicious time for the Philippines to wield its strategic geographical configuration and location and take advantage of the growing economic importance of the region.
The prospects of emerging markets that include several countries of Asean, according to Dr. Villegas, appear encouraging. Indonesia, Malaysia, Philippines, Singapore and Thailand have already eliminated barriers to investments and tariffs in 90 percent of the products with the rest of the Asean member States following in 2015. The average tariff rate that China levies on Asean goods would be cut to 0.1 percent from 9.8 percent.
In return, average tariffs imposed on Chinese goods by Asean member States will fall to 0.6 percent from 12.8 percent.
The forecast of increased intra- and inter-regional trade is buttressed by the Asean-Chinese trade with the rest of the world, which has reached $4.3 trillion or about 13.3 percent of global trade. The Philippine maritime industry should be able to reap the benefits that go with this economic break resulting in a corresponding increase in the demand for regional sea transport.
Engines of growth
Dr. Villegas cited several engines of growth for the Philippine economy that the maritime industry may find relevant for the coming year. These include the country’s young population, domestic tourism, agriculture, and infrastructure and manufacturing.
For the first component, a young demographic profile means that there is increased need for policies and programmes that give urgent attention to human capital development. How much of these policies and programmes cater to the demand for maritime manpower, not limited to seafaring, has to be properly determined.
It is conceded that the country’s maritime education and training remain focused on the requirements of shipboard jobs. This is despite the presence of multinational maritime enterprises in the Philippines and our continued invitation for investments in the sector that would have need for specialized maritime knowledge and skills. Shipbuilding and repairs, port operations and management, logistics, marine biology and environment, maritime infrastructure engineering and domestic shipping are but a few of these enterprises. To some, especially the multinational companies, employing expatriates becomes a necessary option, when Filipinos with proper training could do just as well.
Enabling both Government and industry to develop the Filipino youth to become useful members of society in general and to be work-ready in the maritime industry in particular should be an essential element of one of President Duterte’s 10-point agenda, that of investing in human capital.
Domestic tourism is another driver of economic growth. Going around the Philippines with picturesque islands, beaches and pristine waters, has become a favorite recreational activity among local tourists. The desire to experience diverse yet distinct local characteristics becomes a reality for many Filipinos as mobility within the archipelago is enhanced. The comfort, economy and safety of travel by sea make many tourism sites easily accessible.
The country’s maritime industry links with tourism for obvious reasons. Sustaining the attractiveness of domestic tourism hinges on making available regular transport facilities, a matter that Government must ensure and the shipping sector should commit to provide.
Again, it is a call to Government and the industry to realize President Duterte’s platform under his 10-point agenda of promoting value chain development toward increasing agricultural and rural enterprise productivity and rural tourism.
In staying competitive in shipping, the Philippines needs to examine the global and regional perspective affecting the industry, strengthen local capabilities and where warranted, undertake policy, legal and institutional reforms.
The President has given direction; we await who will take the first action step.