Ramping up infrastructure development to attract more foreign capital should be the government’s priority to support manufacturing expansion, the Department of Finance’s chief economist said.
“With the continued slump in the global economy and decline in the export industry, the government should continue encouraging foreign and local investors to set up businesses in the country,” Finance Undersecretary Gil S. Beltran said in a bulletin.
In order to entice more investors while also boosting the local economy, Beltran said “the continuation of PPP (public-private partnership) especially on infrastructures and road projects is vital.”
To date, 10 PPP projects have already been awarded, about 14 projects are currently under procurement, and around two are for rollout.
Including those still in the pipeline, up to 40 projects worth a total of $25.3 billion would be contributed by the Aquino government’s centerpiece PPP initiative to help fill the country’s $127.1-billion infrastructure gap estimated by Manila-based multilateral lender Asian Development Bank for the years 2010-2020.
Beltran also urged the government to “intensify its programs to strengthen the resiliency of the country against climate change, as this severely affects the agriculture sector, which employs some 30 percent of the workforce.”
As the onslaught of the prolonged dry spell due to the El Niño phenomenon also impacts on agricultural produce, Beltran urged homegrown firms to expand their sourcing of raw materials.
“The manufacturing sector, particularly food manufacturing, may not need to wait for the agricultural sector to provide the needed inputs. The Department of Trade and Industry may need to assist the sector to look for alternative sources of inputs to reduce factory downtime and avoid food price increases,” he said.
Citing a recent Philippine Statistics Authority report on manufacturing, Beltran said food production has slightly improved as of November last year, although year-to-date output remained lower than the year ago levels.
Beltran noted domestic companies benefit from the low oil price environment, hence should take advantage of it. “The continued decline in oil prices allows local firms to produce more goods at lower cost of production. This will compensate for losses in export sector.”