The Philippines can speed up its economic recovery from the COVID-19 pandemic by improving policies and initiatives on three industry clusters according to the World Bank, which also recommended several policy changes in the country’s exports sector.
According to it its latest report dubbed “A New Dawn for Global Value Chain Participation in the Philippines,” which was launched on Thursday, the Philippine government should focus on these three sectors to bounce back faster: 1) industrial, manufacturing and transport, 2) technology, media and telecommunication, 3) health and life science.
“Greater participation in global value chains can be a powerful driver for productivity and growth, enabling countries to leapfrog their development process as seen in many countries in East Asia,” Ndiame Diop, World Bank country director for Brunei, Malaysia, Philippines and Thailand said in a statement.
Diop added that countries which have leveraged their strengths in specific tasks and roles in manufacturing, services and export at scale create more jobs and reduce poverty faster.
Trade Secretary Alfredo Pascual, who delivered a speech during the event, said the government adopted these three sectors under their development blueprint, the Strategic Investments Priorities Plan.
“We have added the modern basic needs and resilient economy cluster, fostering economic resilience and long-term sustainable and inclusive growth,” Pascual said.
According to the Department of Trade and Industry, this additional cluster refers to modern basic needs such as food, shelter, infrastructure, education and other activities which foster economic resilience.
One of the recommendations in the World Bank report is for the Philippines to attract foreign direct investments in design capacity to capture a bigger market share in the electronics, electrical parts and components sector.
Danilo Lachica, president of the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI) said on the sidelines of the event that the local semiconductor industry exported $45.6 billion worth of goods in 2021, which is projected to grow by 10 percent this year.
“A devaluating peso is good for exporters. However, that is offset by the high power, fuel costs,” Lachica told reporters on the sidelines of the event when sought for comment about the growth prospects this year.
Earlier last month, SEIPI said that the Philippines’ cumulative electronics exports reached $26.51 billion as of July 2022, which is a 1.9- percent increase from last year’s figures.
The study also said that the Philippines’s business process outsourcing (BPO) sector stands to benefit from providing value added services such as analytics and implementing institutional policies such as fast-tracking the implementation of the AI (artificial intelligence) road map.
The Philippines BPO sector is one of the crowning glories of the Philippine economy, with strong prospects in revenue growth and job generation.
According to the IT-BPM Process Association of the Philippines (IBPAP), the industry grew its revenue in 2021 by 10.6 percent, recording $29.49 billion in gross revenues.
This is projected to nearly double in 2028, reaching an annual figure of $59 billion.