13 October 2018
Published also in Business Mirror
THE Philippine Board of Investments (BOI), the country’s primary industry development and lead investment promotion agency (IPA), and the International Finance Corp.-World Bank (IFC-WB) signed a memorandum of understanding (MOU) to collaborate on the further development of Investment Policy, Industrial Promotion and Local Supplier Linkages in the Philippines.
The agreement was recently signed by Trade Undersecretary for Industry Development and Trade Policy and BOI Managing Head Ceferino S. Rodolfo and IFC Country Manager for the Philippines Jane Yuan Xu during the BOI’s 51st Anniversary Program in Makati City on September 21, 2018.
In support of the Philippine government’s implementation of the Inclusive Innovation Industrial Strategy (i3S), the MOU calls for the IFC to provide technical assistance and advisory support to the DTI-BOI through a foreign direct investments (FDI)-centric industrial promotion by repositioning the Philippines as a competitive location for next-generation investments in the Asean region.
With further investment policy reforms and institutional framework, it will allow the country to be ready for the Fourth Industrial Revolution (otherwise known as Industry 4.0) with next-generation strategies dubbed as “Businessmen Environment 4.0” and “Investment Promotion Strategy 4.0.”
“Industry 4.0 is potentially disruptive and poses a challenging task on how to sustain not only the level of FDI inflows but also the growth of manufacturing and services in the economy. We have to be ready on how to offset these challenges and disruption with new strategies and interventions tailor-made for industries so that they will able to maintain their growth and competitiveness,” Trade Assistant Secretary for Industry Development Rafaelita Aldaba said.
Meanwhile, Yuan Xu said, “IFC is pleased to be supporting the BOI in achieving a resurgence of Philippine industry and positioning the country as a competitive location for next-generation investment in Asean. We hope to work closely with the BOI in improving policies that will promote investments and increase the Philippines’s domestic value-added through strengthened local supplier linkages, as well as strengthening and upgrading investment promotion agencies’ work force.”
“Since the i3S is designed to improve competition and innovation in the Philippine industry, the country will be able to capitalize on the opportunities due to rapid globalization and the dizzying development of automation, robotics and artificial intelligence,” Rodolfo said as he expressed confidence that increasing backward linkages among industries will deepen the supply chains and accelerate its further integration in the value chains not only regionally, but globally.
The “FDI centricity” of the MOU will help cascade the i3S forward by sharpening the focus on developing innovative and globally competitive industries strongly linked to domestic and global value chains (GVCs).
Hence, the project complements the i3S, which aims to link and integrate manufacturing, agriculture and services to address supply-chain gaps, deepen participation in GVCs and develop globally competitive and innovative industries. To increase FDI among targeted sectors, the project intends to fully develop and implement a highly proactive investment promotion campaign repositioning the advantages of the electronics, automotive (including electric vehicles) and aerospace sectors and a branding campaign positioning the Philippines as a competitive investment location.
The project will focus on shifting the emphasis from attracting the right investors for homegrown products toward developing the right products and premium investor servicing that will attract and secure the necessary investments in the future. The project will also channel its resources with programs toward skills and competency upgrading among employees of the IPAs so that they will be better equipped to handle the disruptive changes.
The MOU also calls for the local supplier development interventions to come in pilot initiatives covering electronics, automotive (including electric vehicles), aerospace and related sectors.
The BOI serves as the primary policy-setting agency on investment and industry policy of the government of the Philippines. It is also tasked to prepare the Strategic Investment Priority Plan (SIPP) which will provide the policy and strategic anchor for the interventions outlined in the project.
To implement the project, the BOI and IFC will also work with the Philippine Economic Zone Authority to pilot the local supplier development program and partner with relevant industry associations such as the Semi-conductor and Electronics Industries in the Philippines Foundation Inc.m Electronic Industries Association of the Philippines Inc., Chamber of Automotive Manufacturers in the Philippines, Electric Vehicles Association of the Philippines and the Aerospace Industry Association of the Philippines to execute specific activities.