Agriculture to replace electronics as RP’s top export – economist

Published by rudy Date posted on April 29, 2009

MANILA, Philippines – Agriculture will replace electronics as the country’s biggest export if the government will not be able to develop sophisticated infrastructure that will prevent big ticket investors like Texas Instruments from leaving the country in the next five years, an economist said yesterday.

Speaking before leading businessmen during the general membership meeting of the Management Association of the Philippines (MAP), University of Asia and the Pacific (UA&P) professor Bernardo Villegas said that the life cycle of any product is 30 years.

“Product life cycle is 30 years unless the country improves its infrastructure,” Villegas noted. “We have to say goodbye to electronics.”

According to him, major investors like Texas Instruments will follow the example of Intel and move out of the country in the next five years.

“The problem of electronics is not the crisis. Every industry goes through a product life cycle,” Villegas explained.

He said that the decision of Intel to leave the Philippines was made before the financial crisis hit.

Latest data released by the National Statistics Office (NSO) showed that electronics make up 54 percent of the country’s exports while overseas sales of agro-based products is 5.6 percent.

Villegas said that the electronics sector is not the first industry to suffer. He said the biggest solution to this problem is agriculture. The economist said that in order to do this, the government must help the small farmers.

Villegas said that aside from feeding the 90 million Filipinos, the agriculture sector must produce surplus in order to address the problem of the Chinese of feeding its 1.3 billion people.

He said that the SouthEast Asia will be the agribusiness paradise of China .

In spite of the gloomy outlook in electronics, Villegas said that all is not lost. “It is not too late. This is a challenge for the industry to go up the value chain.”

He said the country cannot capitalized anymore on cheaper labor. He said that other factors have not improved and this is the reason why investors may move out. He said specialized services may be offered and infrastructure can be developed further.

At the same time, Villegas warned that the country must not make the same mistake it made in electronics with the Business Process Outsourcing (BPO) sector. He explained that the BPO is just starting its 30 year life cycle.

He stressed that there is time to improve on the services and infrastructure. Instead of concentrating on voice or call center operations, specialized services can be offered like backroom operations. –Ma. Elisa P. Osorio, Philippine Star

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