PIDS urges revitalization of manufacturing sector

MANILA, Philippines - The country must work on revitalizing its manufacturing sector in order to make growth more inclusive, the Philippine Institute for Development Studies (PIDS) said.

PIDS president Josef Yap said yesterday in a press conference launching the 10th Development Policy Research Month, the country’s economic growth has not been inclusive partly due to the inability of the domestic manufacturing sector to benefit from economic integration.

He noted that while trade in parts and components in manufacturing goods has been increasing in the Southeast Asian region, the contribution of the country’s manufacturing sector to the total economic output has deteriorated.

Citing data from the United Nations, he said the share of Philippine manufacturing in the gross domestic product declined to 21.4 percent in 2010 from 27.7 percent in 1980.

“We were not really able to participate in regional production network...We import parts and assemble them for re-export. There was very little value-added to these exports,” he said.

He said that while there are other reasons for non-inclusiveness of growth, a stronger domestic manufacturing sector would have made growth more inclusive.

“A more dynamic sector would have provided more higher-paying jobs to the less-educated workforce, thereby making poverty reduction faster,” he said.

Rafaelita Aldaba, senior research fellow at the PIDS, said in the same event that while the manufacturing sector has slowed in the past years, beefing-up the sector could help create more jobs and achieve more inclusive growth.

She said the government is preparing an integrated manufacturing industry road map which would cover 30 industries to strengthen the sector.

“Our target date to come up with the integrated manufacturing road map is October,” she said.

She said the road map would be based on the draft of plans submitted by different industry associations to the Department of Trade and Industry.

“We will try to identify impediments to growth and come out with measures to address the barriers,” she said.