Commerce and Industry Secretary Alfredo E. Pascual said the Philippines should reconfigure its exports into industrial clusters and strengthen participation in the global value chain (GVC) to become more attractive to investors.
Pascual said this in response to a statement by the World Bank’s Country Director for Brunei, Malaysia, the Philippines and Thailand, Ndiame Diop, on his report “A New Era for Participation in Global Value Chains in the Philippines”. , which highlights the need to increase the country’s participation in GVCs. in a post-COVID-19 world. The report was released on October 6, 2022 at the Fairmont Hotel in Makati and brought together public and private participants who were actively involved in providing input and information on the report.
Pascual cited this opportunity to embark on industrial transformation, reconfigure our exports into industrial clusters and strengthen participation in GVCs; and make the Philippines a more attractive investment destination. “We in the new administration are determined to get the country back on its high growth path and maintain the momentum towards an inclusive and resilient society,” Pascual said.
In the report, WB said it hoped the Philippines could take advantage of the new dawn for GVC industrial clusters by repositioning itself and increasing its participation in the global context of reconfiguration.
According to the World Bank, achieving this requires no less concerted efforts by the government and private sectors and other key players in executing a plan that can guide investments from domestic and foreign investors.
Secretary Pascual pointed out that the country was already showing signs of economic recovery, with its gross domestic product (GDP) growing by 7.4% in the second quarter of this year, which marked the fifth consecutive quarterly growth since the beginning of 2021. “Challenges remain. Inflation stood at 6.9% in September and rising costs and supply chain disruptions have slowed the country’s economic momentum. Despite these challenges, the government remains focused on fully reopening the economy and on its goals of cost reduction, price stabilization, and health, food and energy security,” he stressed.
Pascual said implementing an inclusive, sustainable and resilient industrial policy is imperative to building a more competitive economy, and through science, technology and innovation (STI) and essential digital technologies, industries will be better placed to face competition both nationally and domestically. export markets and pave the way for industrial processing.
“We will prioritize four industrial clusters to drive our country’s growth. The selection of these clusters is guided by the WB’s analytical report on the reconfiguration of GVCs last year and is confirmed by the report which is launched today. Pascal added.
The clusters are identified as (1) the industrial, manufacturing and transportation (IMT) cluster; (2) Technologies, Media and Telecommunications (TMT); and (3) health and life sciences cluster (HLS). “We have added the Modern Basic Needs and Resilient Economy cluster, fostering economic resilience and long-term sustainable and inclusive growth. Supporting the country’s increased participation in reconfigured GVCs is a long-term pursuit that involves addressing structural, systemic, and sectoral constraints to growth.
“In terms of policies to make the Philippines an attractive destination for FDI, we are implementing recently passed laws or reforms that relax foreign ownership restrictions or encourage investment. These include the CREATE Act, amendments to the Civil Service Act and the Foreign Investment Act, and the Retail Trade Liberalization Act. CREATE, in particular, is supported by the Strategic Investment Priorities Plan (SIPP). Through the SIPP, CREATE serves as a tool for innovation, digital transformation and industrialization,” Pascual explained.
The DTI is also advocating for legislation that will further enhance the development of trade and industry. “We are adopting export measures to promote domestic processing for greater value addition of our reserves of green metals, such as nickel, cobalt and copper. These measures should complement our efforts to enable 100% foreign ownership in solar, wind, tidal and other renewable energy (RE) power projects by amending the rules and regulations under our Renewable Energy Act,” Pascual said.
The Secretary further added that the Board of Investments (BOI), of which he is the Chairman, is working with the Commission for Higher Education (CHED) on the National Skills Mapping and Human Resource Development Survey. “I am happy to share that BOI also promotes University-Industry Matchmaking or “AIM!” These projects will identify appropriate interventions to minimize skills mismatch at regional or provincial level; they stimulate the interest of university students to pursue future-ready programs.
Souleymane Coulibaly, World Bank Program Manager for Equitable Growth, Finance and Institutions and author of the New Dawn report, presented highlights of the launch of the GVC. He said that over the next six months, “the Philippines will need to address barriers to attracting FDI and facilitating trade through the full implementation of key economic bills recently passed. next three years, the country needs to promote investment and competition in logistics and connectivity services as well as the development of an innovation ecosystem while advancing the digitalization agenda to boost manufacturing.
When asked how easily the audience would understand GVC during the roundtable, Undersecretary for Commerce and Director General of the BOI, Ceferino Rodolfo, jokingly layed it out: “Just look at my cell phone. The camera system is from the Philippines, the LCD from the Philippines or Vietnam, the chips from Indonesia or Thailand, and the software from the Philippines or Malaysia.
“This new dawn for GVC participation in the Philippines represents a golden opportunity for the country. By working together, we can make this happen in the Philippines,” concluded Rodolfo.
SUBSCRIBE TO THE DAILY NEWSLETTER
CLICK HERE TO JOIN
