To create globally competitive, value adding, innovative and inclusive industries is the main objective of the country’s new industrial strategy, the trade and industry chief declared.

Speaking on the first day of the Manufacturing Summit 2016 yesterday (28 November), Department of Trade and Industry (DTI) Secretary Ramon Lopez emphasized that the new strategy focuses on industries where the Philippines has existing and potential comparative advantage to generate employment and promote entrepreneurship.

The new strategy’s 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 towards 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,” said Sec. Lopez.

Citing the country’s positive economic outlook as the fastest growing economy in Asia with sustained strong macroeconomic position at 7.1% recorded growth in the third quarter of 2016, the trade chief shared that the Philippines outpaced other countries like China (6.7%) and Viet Nam (6.4%) and fared above average consensus forecast of 6.8%.

While services industry was the main driver of the country’s growth in past decades, the manufacturing industry has been playing an important role, and has been contributing substantially to economic growth since 2013, according to him. In the third quarter of 2016, manufacturing grew by 6.9% or more than one percent point higher that the rate posted in 2015 at 5.8%.

He also said that the manufacturing sector presents opportunities to provide productive jobs to low-skilled, medium-skilled and highly-skilled workers, and further emphasized the need to shift from traditional agriculture to more modern agribusinesses, as well as the relevance 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 are young with ages ranging from 15 to 24 years old, 61% are male and 40% have high school education, while 36% 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 Sec. 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, Sec. Lopez also called on stakeholders to take advantage of preferential free trade agreements, where the country may benefit. Specifically, he referred to those with ASEAN, as having over 100 million population, a growing middle class, rising consumer and business confidence.

“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 grows further to over three billion people representing 45% of the world’s population,” he added.

Taking into account external factors such as economic slowdown in US, Japan, Europe and China, opportunities from participating in global value chains and emerging new business models, the DTI chief 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,” explained Sec. Lopez.

The summit participants, composed by 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.

Sec. 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.”

The two-day Manufacturing Summit is in partnership with the DTI and the Board of Investments (BOI), in cooperation with the United States Agency for International Development (USAID) and the Japan International Cooperation Agency (JICA).