PH firms weighed down by smuggling, high power cost

Smuggling and the high cost of power were identified among the top “binding constraints” that hamper the competitiveness of Philippine industries.

These “constraints” were cited in the sectoral analysis of industries such as electronics, cement, IT-business process management, automotive, iron and steel and chemicals presented by the Board of Investments.

The analysis proves that incentives, specifically income tax holidays, are not enough to boost an industry, as more focused programs will be needed to increase productivity and reduce production costs, Trade Assistant Secretary Rafaelita M. Aldaba said yesterday.

Interagency coordination will also be critical, as in the case of smuggling, which will require action from several government agencies.

“That’s why we are forming the Industry Development Council. The Department of Trade and Industry has to coordinate with other government agencies [to make] it easier for companies to invest,” Aldaba explained.

The sectoral analyses are crucial as these will allow the BOI to determine what kind of incentives or policy interventions a particular industry will need to become a significant contributor to the Philippine economy.

These also determined a sector’s impact in terms of employment contribution, potential to move up the value chain, and potential to create competitive markets.

At the same time, the BOI, together with industry associations, identified the supply chain gap and policy responses needed to boost specific sectors.

Inputs from the analyses and consultations will be used in the crafting of the final 2014 Investments Priorities Plan.