Phl needs to strengthen manufacturing sector

CEBU, Philippines - While it has been acknowledged that the industries related to business process outsourcing, tourism, real estate development and retail trade are considered to be key economic growth drivers and interest areas of investors, it has also been believed that there is a need to focus more in developing the manufacturing industry of the Philippines.

The National Economic Development Authority (NEDA) projected that strengthening the country’s manufacturing sector will pave the way for higher, sustained and inclusive growth as it has the highest inter-sectoral linkages in the economy.

NEDA regional director Efren Carreon said services-led growth has not created adequate jobs for most of the Filipinos and although the booming BPO industry generates employment opportunities, the impact is limited with its bias towards the educated labor.

He added that those who are in need to earn a living are those who are in poverty state and are not as much well-educated compared to the employees in the services sector.

“What we push for BPO, we push more for manufacturers,” he said.

The limited job opportunities for Filipinos, he said, resulted to slow poverty reduction in the country.

In his presentation during the Micro, Small and Medium Enterprise Conference, he noted a study from Asian Development Bank designed to transform the Philippine economy by applying the tips in manufacturing practiced by other countries such as Korea, Malaysia and Singapore.

Carreon cited that the industrialization in Korea is largely attributed to large-scale enterprises wherein subcontracting with small and cottage producers is practiced.

He further said that the industrial policy could be used to integrate domestic small and medium enterprises to growth areas which are more labor-intensive than large firms.

The Philippines could also learn the Strategic Industrial Policy Local Industries Upgrading Program as practiced by Malaysia and Singapore in which the government encouraged transnational corporations to adopt a group of SMEs and transfer technology and skills to them, he added.

Carreon also presented the external threats in the industry which includes the eurozone crisis, economic slowdown in China, reduced import demand, tighter international capital conditions, increased precautionary savings abroad and within the region and oil price uncertainties. (FREEMAN)