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Philippines urged to focus on manufacturing

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The manufacturing sector remains critical for Asian countries like the Philippines to prosper and avoid the middle income trap, according to a report of the Asian Development Bank.

In one chapter of Key Indicators for Asia and the Pacific 2013, the ADB’s flagship annual statistical publication, the multilateral lender noted that a progressive manufacturing sector was key to highly productive service sector, technological innovation and in modernizing agriculture in Asian countries.

“Historically, no economy has reached high-income status without reaching at least 18 percent share of manufacturing in output and employment for a sustained period,” ADB chief economist Changyong Rhee said in a statement issued Wednesday.

“Right now, as services boom in the region, it’s tempting to shun industrialization, but it will be a serious mistake if a country wants to be prosperous,” Rhee added.

The report noted that several economies rapidly industrialized to become high-income countries. These included Hong Kong, China; Japan; Republic of Korea; Singapore and Taipei.

Other developing Asian nations—such as Bangladesh, India, Pakistan and the Philippines—are changing even more slowly, have created fewer manufacturing jobs and are shifting from agriculture to services.

The Philippines, which has had less success at building a manufacturing sector, will specifically need to develop a much deeper industrial base to complement its service sector to avoid being caught in the middle-income trap, the ADB said.

According to the report, several factors help explain why the Philippines failed to industrialize, despite attempts to do so in the 1980s.

The ADB said the Philippines’ shallow industrial base was nearly decimated by the ensuing internal and external crises. The Philippines remained constrained by narrow export specialization, import dependence, and a shallow knowledge base. The reasons include macroeconomic policies, flawed incentive structures and lack of nationalism among the “captains” of industries.

Added to this was the discord in trade, investments, domestic regulation, human resources, and science and technology policies that were supposed to complement the industrial programs in the 1960s to 1980s, the ADB said.


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Tags: economy , manufacturing , Philippines

  • 33Sam

    GOOD IDEA BUT IT WON’T HAPPEN AS LONG AS YOU ARE CONTROLLED BY FOREIGN BANKSTER GLOBALISTS LIKE GOLDMAN SACHS WHO WANT TO KEEP THIRD WORLD COUNTRIES FROM DEVELOPING. THESE GLOBALISTS BOUGHT OFF YOUR LEADERS TO INSTALL ROBBER BARONS WHO HAVE TAPPED INTO YOUR CENTRAL BANK, YOUR TREASURY, MADE YOU PASS A 12% VAT TO FURTHER CAUSE BANKRUPTCY, ADDED ONTO THE HIGH PRICE OF ENERGY, CAN NEVER BE AN ENVIRONMENT FOR GROWTH. IT WAS NEVER DESIGNED TO GROW.

    YOUR LEADERS ARE TRAITORS. FIDEL RAMOS SIGNED PA 21 IN 1997 WHICH THEN PUTS ECONOMIC CONTROL OF THE PHILIPPINES IN THE HANDS OF THESE GLOBALISTS. AND IF THEY HAVE NO PLANS FOR YOUR DEVELOPING, THEN YOU SHOULD WAKE UP AND SEE THAT ANYONE CAN BUY SOMETHING UP AND LET IT LIE FALLOW!!! THROUGH AGENDA 21 THEY CONTROL ECONOMIC ZONES, ZONES THEY’VE DECIDED WHO GETS TO PRODUCE WHAT. AND IF THEY DECIDE YOU DON’T PRODUCE ANYTHING, THEN WHAT DO YOU DO???

    OLDEST TRICK IN THE BOOK. BANKRUPTCY BY DESIGN. CORPORATIONS PULLING UP STAKES BECAUSE YOUR GOVERNMENT AND LEADERS ARE CHOKING OFF ANY GROWTH BY BOWING DOWN TO FOREIGN BANKER MAFIA WHO HAVE CONTROL OF YOUR ECONOMY BY DESIGN, IMPLEMENTING ALL MANNER OF FEES AND TAXES, REGULATIONS AND RED TAPE TO DO JUST THAT.

    IF YOU CAN’T WAKE UP TO THIS, NOTHING WILL GROW AND YOU WILL STILL BE HERE SCRATCHING YOUR HEADS AS TO WHY NOTHING CHANGES!!!

    AND THE BIGGEST ITEM YOU NEED TO WAKE UP TO IS HOW YOUR PRESIDENT BETRAYED YOU SIGNING AGENDA 21!!!

  • BoracayADMIRER

    GERMANY.
    Germany is so successful (compared to England or USA) because it has such great manufacturing e.g. cars (BMW, Mercedes, Porsche etc..) machines (Siemens, Bosch, Osram) and chemicals (BASF, Bayer etc..)
    We should not look always to the USA.
    We shold take Germany or Japan as an excellent example.

    • 33Sam

      YEAH GOOD THOUGHT BUT THE PHILIPPINES IS A GLASS CEILING BY DESIGN. AGENDA 21 MADE DOUBLE SURE THAT THE PHILIPPINES WILL NEVER BE AN ECONOMIC ZONE LIKE GERMANY NOR CHINA, NOR TAIWAN, NOR KOREA.

      THE PLAN FOR AGENDA 21 IS TO PREVENT THIRD WORLD COUNTRIES FROM DEVELOPING.

      YOU CAN SEE THE NICE DINNER FROM THE WINDOW WHILE YOU STAND OUT IN THE COLD.

      BUT UNLESS YOU REALIZE WHO MADE YOU TO STAND OUT IN THE COLD AND TELL THEM TO GO TO HELL, YOU WILL ALWAYS BE THERE ON THE OUTSIDE LOOKING IN.

      FIDEL RAMOS BETRAYED HIS COUNTRY AND YOU BY MIDNIGHT SIGNING PA 21 AKA AGENDA 21 IN 1997 AFTER THE QUEEN OF ENGLAND KNIGHTED RAMOS IN 1995.

      YES THE BRITISH EMPIRE IS PART OF THE GLOBALIST MONSTER.

      RAMOS SIGNED YOUR DEATH WARRANTS ON MANY FRONTS. ECONOMIC, MILITARY, MAKING THE PHILIPPINES A SUZERAINTY UNTO THE UNITED NATIONS WHO CONTROLS THE SHOTS.

      AND SINCE DAVID ROCKEFELLER INVENTED AGENDA 21 AND CREATED THE UNITED NATIONS AND IS A BILDERBERG MEMBER OF EUGENICISTS, THEY THROUGH ALL THESE SO CALLED “DO GOODER FRAT CLUBS” ARE PUTTING THE SCREWS TO YOU ON A DAILY BASIS.

      EUGENICS IS ALL ABOUT KILLING OFF RACES THAT THESE EUGENICISTS FEEL ARE USELESS EATERS.

      GUESS WHO LOOKS TO BE ON THAT GENOCIDE LIST???

      WONDER WHY YOU CAN’T PROSPER???

      BECAUSE YOU ARE BEING CONTROLLED NOT TO PROSPER WHILE YOUR LEADERS AND GOVERNMENT HAVE TURNED INTO WHORES TO GO ALONG WITH THE GLOBALIST-EUGENICISTS’ PLANS TO GO ALONG TO GET ALONG SEALING YOUR FATE AS WELL AS THEIRS, YOUR LEADERS BELIEVING THEY ARE ON THE WINNING SIDE WHO WILL NOT BE INCLUDED IN THE “SAVED” CATEGORY WHEN THE GLOBALIST-EUGENICIST-SATANISTS PUSH THE FINAL BUTTON ON HUMANITY.

  • CyberPinoy

    The Govt should create shipbuilding to manufacture the much needed Miltrary Vessels, isama na din dyan ang pag tayo ng factory para naman sa pag manufacture ng indegenous Military vehicles like APC or light tanks. for start we can forge a joint manufacture deal with other countries for technology transfer . Mabibigyan pa ng trabaho mga pinoy magiging self sufficient pa tayo sa mga pangangailangan nating equipments. We are not short of expertise like Engineers taon-taon ang daming nagraduate sa kolehiyo ang kailangan lang talaga ng Pinas yung mga bagong machineries magkaron tayo dito sa pinas para hindi na kailangan lubas ng bansa at dun ma-train makahawak ng latest equipments.

    Self sufficiency is the key, kung pwede naman gawin dito using local materials then wag na iangkat pa sa ibang bansa at magtayo nalang ng manufacturing sa pinas mismo.

  • md’couplus.cal

    You have to remember that starting 1980′s after the Marcos’ amassed our treasury, we nose dive the country with the corrupt leaderships in the executive office down to the senate and congress, then filtered down to the lowest level of government. Chinese and Taiwanese smuggling, with the aid of corrupt public officials and servants, of absolutely no quality products into this country made our industrialization even harder.

    Our products and inventions are way better in quality than most countries, however, because of smuggled goods by these chinks, whats left are the inferior and very cheap chinks products.

    How to fix it, its from the executive office. Not anywhere. The president will need to clean all branches of government and reinstate death penalty to all public officials including himself, committing crimes, graft and corruptions and stealing from the citizens.

  • eight_log

    This is the sector into which investors must be enticed to venture into … enough perks must be given them … say a 10 year-tax holiday!!!! Those buying into existing ventures will have to be taxed more.

    Pinas needs a base not in stock market but to market stocked foods and other durable goods!!!!

    • kenjigraphics

      I’d also add to that the need for the gov’t to focus on creating more enticing Special Economic Zones, not only in the service sector, but also in the manufacturing. The government should also think of creating a “government corporation” to encourage Filipinos to aspire to work in the manufacturing industries (more engineers), and kickstart our almost non-existent manufacturing sector. This was how industrialization in Europe got started; their government invested in the notion of ‘mercantilism’.

  • Marc

    We have a lot of talented Engineers and Technicians working abroad – they are our strength. Most of them wants to go home if opportunities are available. They can also share their experience and share them with new grads and less experience. We can offset the cost of electricity by being productive. We must mechanize and automate. But of course improve the system in doing business. It’s very bureaucratic. Cut those red tapes. Reduce the income tax. They are wasted anyway.

  • carlcid

    It was so much easier to depend on the old reliables: OFW remittances, BPO’s, consumer spending and the Filipino taxpayer, who coughed out VAT, sin taxes and a host of other levies that fattened the purse of the national government and caught the favorable attention of credit ratings agencies.

    On the other hand, it is so much more difficult, and involves much more hard work, to build up manufacturing and develop agriculture. So government took the expedient way and ignored these. Besides, with monetary easing washing up on Philippine shores, money was cheap and the economy was booming, albeit only superficially.

    Now that monetary easing will be curtailed and the days of cheap money and heady consumer spending could be coming to an end, we finally take a second look at manufacturing. We should also take a look at agriculture. It has been neglected, yet it could be a great way to shore up our economy. Thailand and Malaysia have shown the way.

  • Siako Estrangero

    Why not enforce anti-dumping law to completely eradicate these cheap-but-not-so-reliable imported goods from you-know-where so we can patronize our own. But for the local industries please be innovative. Electric fans for instance, these Xiaweiah’s offer solar-powered, why can’t Camel or Standard make those kind of innovative products so we can patronize you more?

  • blogger3

    Filipinos need to buy Philippine made products to develop manufacturing. The government needs to encourage the people to do so or else they will always settle for the cheaper one.

    • manufacturer2

      Philippine made products can only survive if smuggling is curbed or eradicated. Income tax holidays should be given as incentives to manufacturers, as well. Problem is, smuggling is bigger than ever and income tax holidays are only given to BPO’s and “pioneer status” manufacturing.

      • Karabkatab

        Locally made durable goods like construction materials are far superior that cheap imports. I prefer local materials even though they are a bit high in price. The government must first do something about lowering the cost of doing business (power, transport cost and fees and licenses) if we want to venture in manufacturing and be globally competitive.

      • manufacturer2

        Most construction material imports (flooring, windows, etc.) are as well made as local. What makes them “cheap” is smuggling. Our power costs are high, if not the highest, in the region. That is a simultaneous problem to smuggling that needs to be addressed. Regardless of other costs, smuggling is the most catastrophic reason to manufacturing decline both in raw materials and finished goods.

      • md’couplus.cal

        There aint any. I always shop local and try to find local for construction materials for my home. But, all hardware stores are mostly chinks and hard to find local products and materials. I had to go big box stores to find un-chink items.

        Local products are a little bit more but they last much longer than chink products that literally go berserk in a week sometimes in an hour.

    • md’couplus.cal

      We do not exactly have filipino made products that local consumers buy. There are massive chinks products flooding the market like poisoned toys and plastic items, and electronics.

      I am an american, but I choose to buy filipino products wherever I go to shop in this country for household items, garden, kitchen stuff and food. I never, and I say again, never, buy any canned or produce items and goods from china or taiwan for safety reasons, its very dangerous due to mostly high level of arsenic, mercury, cadmium and lead. Believe me, produce items from china are everywhere in grocery stores in SM and other big markets. Proven in the US and checked by FDA, most products from those countries carry a lot of poison. And I rarely, if not at all buy any chinese products owned by a chinese company.



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