DTI-BOI says RP is the New Growth Area
WITH the manufacturing sector soaring high alongside the services and agriculture sectors, the growth rate from 2009 to 2015 as presented by the Board of Investments (BOI) shows a positive indicator that the country is moving forward economically.
Amidst the fast changing global conditions, the Philippines can now be considered as a new growth area. RP’s impressive 6.8% growth rate in 2012 and 7.2% growth posted in 2013 (second to China’s 7.7%) as providing the necessary momentum that would drive the country to a higher and more rapid growth path. The economic outlook remains positive with 6.1% growth rate posted in 2014. Indeed, these are exciting times for the country as it now faces a decisive moment for the future of industries.
In the chart of building blocks presented and shown at www.industry.gov. ph/ roadmaps, the set of market opportunities are highlighted representing the category of growing market with demographic sweet spots on the middle class. Under the area of operating environment, it shows the positioning of strong economic fundamentals, political stability and business and consumer confidence. On the set of blocks that highlights policy focus, it mentions a more pro- active government, new industrial policy, Philippine economic zone authority, industry programs to support manufacturing resurgence and investment facilitation an investor care by the Board of Investments. Linked to the policy focus block is labor that includes moderate wage increases, highly trainable work force who are young and speaks English. All these as interpreted in block formation leads to an improved competitive ranking at No. 52 in 201415 as compared to No. 59 in the preceding year.
The BOI attributes this with the high trust rating of the Aquino administration and its continuing efforts to improve the country’s infra- structure and investment climate, as well as our strengths such as low and stable wages, abundant, young, skilled and English speaking workers. The growing middle class, improved competitiveness and implementation of a new industrial policies in the Philippines also attracted new investments that helped boost and catalyze the growth and development of its industries.
According to BOI, a Comprehensive National Industrial Strategy (CNIS) is being pursued to upgrade industries; link together and integrate manufacturing, agriculture and services; address supply chain gaps; and deepen industry participation in global value chains. It sees the private sector as the major driver of growth, while the government acts as coordinator and facilitator in addressing the most binding obstacles to the entry and growth of domestic firms and creation of the right policy framework to encourage the development of the private sector along the lines of the country’s current and latent comparative advantage. The CNIS is implemented within the context of an open market economy, where trade affects growth through competition, innovation, and productivity.
On my personal interpretation of the BOI’s chart on the important channels affecting industry growth, I see it like a stream or downward, inward, sideways and backtrack move of services and external factors that support each other. The BOI combines global, regional, bilateral and multi- lateral trading alongside with external factors and globalization as the major elements that directly advances the free flow of services, manufacturing and agriculture. On the reverse side, the BOI’s chart also includes rule of law, macro stability, peace and order, institutions, internal factors, infrastructures, political climate and government policies and programs as among the elements that support the industry growth.