DTI upbeat on growth of manufacturing sector
Following the impressive growth of Philippine manufacturing during the first nine months of 2017, the Department of Trade and Industry (DTI) expressed confidence the sector will continue to outperform its Southeast Asian neighbors amid rosy business conditions as well as sound economic fundamentals and industrial policies.
Trade Secretary and Board of Investments (BOI) Chairman Ramon Lopez said that given the sector’s latest performance, the agency is already close to the minimum growth target for the manufacturing industry which comprises 25 percent of the country’s gross domestic product (GDP).
“The Department remains relentless in its efforts to revive factories, expand production, generate employment, and enable the industry to provide the catalyst that will build the seamless link between a productive agriculture and a strong services sector,” Lopez said in a statement.
The Philippine Statistics Authority (PSA) in November reported that the Philippine economy grew by 6.9 percent, driven by a robust manufacturing industry which expanded by 9.4 percent and increased its share to GDP by 22.4 percent in the third quarter of 2017.
The growth was one of the fastest in the region, outpacing other Asian countries like China (6.8 percent), Malaysia (5.8 percent) and Singapore (4.6 percent).
The services sector accounted for the highest share to gross domestic product (GDP) at 58.9 percent, followed by the industry sector (33.3 percent), and agriculture sector (7.5 percent). Manufacturing accounted for 69 percent of the total output of industry.
To attain their objectives, Secretary Lopez said the DTI-BOI formulated a new industrial policy known as Inclusive Innovation Industrial Strategy (i3S).
He said i3S is aimed at growing innovative and globally competitive manufacturing, agriculture and services while strengthening their linkages within the domestic and global value chains.
“With innovation at the front and center of the country’s strategic policies and programs, industries would be in a better position to face competition in both domestic and export markets,” he said.
Lopez added that with accompanying measures to improve capacity to penetrate export markets, industries could take advantage of increasing returns to scale and market access opportunities especially those arising from free trade agreements and increasing regional integration in the Asean Economic Community.
He also said that innovation is crucial in addressing challenges such as automation, robotics, artificial intelligence and other new technologies.
Trade Undersecretary and BOI Managing Head Ceferino Rodolfo, for his part, said the BOI is forecasting a robust manufacturing sector with more high-impact, labor-intensive, and socially relevant manufacturing investment projects coming in.
“With the swift approval of the 2017 Investments Priorities Plan (IPP) which was designed to spread the benefits of the country’s fast economic growth to the countryside with emphasis on a broader segment of the manufacturing sector, innovation-driven and job-generating businesses, we see a robust growth of manufacturing investment projects this year,” said Rodolfo.
The manufacturing sector generated investments worth P49 billion in 2016 or 11 percent of total investments last year.
In the first four months of 2017, the sector recorded a 158 percent growth with investment projects amounting to P15.425 billion from only P5.96 billion recorded in the same period last year.
Investments in the sector are expected to generate at least 3,038 new jobs once these projects are operational.
“The revival of the manufacturing sector is key to inclusive economic growth because it will generate much-needed employment and help the country tap regional production networks,” Rodolfo said.
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