The Philippines should focus on reviving local manufacturing as the sector provides the most number of jobs, according to Aurelio Montinola, president of the Bank of the Philippine Islands (BPI). To which Economic Planning Secretary Arsenio Balisacan concurred saying that manufacturing has stagnated and has been neglected for three decades.
“On the medium term, we should focus on manufacturing. We should get back what we lost to China. Today, their cost advantage has disappeared,” said Montinola, private sector reactor at the economic briefing at the PICC yesterday.
Montinola said while it is true that manufacturing is not easily decided on by investors, there is a growing number of companies wishing to set up shop in the Philippines based on anectodal instances of companies which go through the BPI.
“Sovereign issue in the past has changed,” said Montinola.
Another area which Montinola wants the government to focus is on agriculture and fisheries through government-driven irrigation.
He went on to suggest the need to modify the agrarian reform program since its present form prevents banks from accepting agrarian reform lands as collateral, thus limiting farmers’ access to credit.
Over the short term though, Montinola suggests the government should focus on business process outsourcing (BPO), tourism and infrastructure.
With the resilient dollar remittances as the first wave underpinning the country’s growth, Montinola said another strong sector is BPO.
“Let’s hope that the next wave is tourism since this is expected to raise dollars and create jobs… (We should ) improve tourism in BPO-fashion.”
Montinola said infrastructure comes hand in hand with tourism.
He cited as example of the expansion of secondary airports via public-private partnership.
Trade Secretary Gregory Domingo said it cannot be denied there is growth even in manufacturing and that the Philippines is in the “sweet spot” of investors compared with its neighbors, where it posted the second fastest growth in the region after China.
Domingo said in manufacturing grew 5 percent in the first half despite the 7 percent decline in electronics.
“This means non-electronic sectors are growing at double-digit rates,” Domingo said.
He said a number of companies are either building or about to build their factories.
The Department of Trade and Industry (DTI), he said, has received about 320 companies in inbound missions in the first half, which is more than what it had generated in the whole of 2011 and 2010.
“That’s how strong investment interest is. The future is bright. Our story is very good across the board,” Domingo said.
A number of major electronics companies have registered with the Philippine Economic Zone Authiority – Canon, Murata, Brothers, Fujifilm, among others.
Apart from electronics, Domingo cited prospects in garments, footwear, shipbuilding and even consumer goods. –IRMA ISIP, Malaya
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