Mapping the investment ecosystem: Mining the sweet spots
(Conclusion)
There are four industry clusters in which the Philippines has already developed some of the requisite competencies.
Within the industrial, manufacturing and transport cluster, we are eager to attract investments in aerospace, automotive, semiconductors and electronics. For example, our country is home to Collins Aerospace, the world’s leading aircraft interiors company, and Lufthansa Technik, a top aircraft maintenance, repair, and overhaul provider doing the maintenance, repair and overhaul at various aircrafts in the Philippines. In August last year, we witnessed Lufthansa Technik’s further expansion in its facilities in Metro Manila.
Our country is eager to join the global electric vehicle value chain as the global shift toward green products, such as electric vehicles (EVs), gains momentum due to climate change concerns. We welcome foreign investments introducing relevant EV technologies and capitalizing on our abundant green metals, such as nickel, copper and cobalt. We can be a critical partner for these essential minerals, not as an exporter of raw ores, but mainly as processor and producer of semifinished and finished products, such as batteries. We’re moving in this direction. In the semiconductor and electronics sectors, we seek foreign investments that promote higher value addition, including skills enhancement in research and development, to improve business prospects for firms in the outsourced semiconductor assembly and test operation. We’d like to go up the value chain, up to probably integrated circuit design and others.
Digital economy
Within the technology, media and telecommunications (TMT) cluster, we aim to engage investors in developing our digital economy, information technology-business process management, hyperscale data centers, and products utilizing artificial intelligence, robotics, 5G, and the internet of things. We encourage investors to leverage the majority (82 percent) of our business process outsourcing firms and shared services centers that already cater to global markets.
For investors in our creative industries, in new films, new laws have been passed for the creative industries. The implementation of the law has again been placed at the hands of Department of Trade and Industry. The investors in the creative industry who are also part of the TMT cluster can anticipate the implementation of this law, the Philippine Creative Industries Development Act. This law recognizes creativity as a cornerstone of our national identity. In line with this, we will establish the Creative Venture Fund, which will finance creative enterprises and individuals as they expand their pursuits, fostering a vibrant and innovative creative sector. I think this has a lot of potential to work to achieve that potential.In the health and life science sector, we are committed to fostering a strategic security role and creating opportunities for our country. We invite investments in pharmaceutical products, medical devices and health management systems. I’m thinking, for example, of getting Japanese pharmaceutical companies —they’re running out of working-age people—to bring their manufacturing facility here. We’ll provide the raw materials, we’ll do the products here and export back to Japan. That’s happening in Dubai; what they do is import all the raw materials from what they call ecozones. They import materials from Europe and do the assembly, finished products and manufacturing in Dubai to export back to Europe.
Resilient economy
To achieve the fourth cluster, the modern basic needs of a resilient economy, we must meet the modern ways of a resilient economy. This cluster addresses the essential needs of Filipino consumers, such as food, goods and energy. Food is very important. We’re working hard to get a supply chain for food organized, so we won’t again suffer from the P800 per kilo price of onion, when the farmgate price is less than P50 per kilo. Moreover, we recognize the critical importance of food security in achieving sustainable and inclusive economic growth. Consequently, we welcome investments in agribusiness, agriculture technology, food processing and packaging and aquaculture. We are moving toward industrialized farming and the challenges of how we consolidate the lands. Hopefully, there is a new law that will focus on land reform that will allow the leasing of land to those who will operate the farm on a big-scale basis.
The Philippines is also dedicated to transitioning to renewable energy (RE) as outlined in the Philippine Energy Plan for 2020 to 2040. Our National RE Program aims for 50 percent RE generation by 2040. With recent reforms allowing foreigners to own up to 100 percent of RE projects in the country, we are working to increase the share of renewables in our national power generation.
We firmly believe that dependable infrastructure is essential for businesses investing in the Philippines. Following the President’s directives, we are committed to building better and more extensive infrastructure in transport and logistics; energy, information, communication and technology; and food logistics. Connecting our ecozones, trade centers and manufacturing and logistics hubs will facilitate vibrant trade and balanced growth among regions. This strategy will address transport and logistics constraints, energy shortages and costs, as well as connectivity issues hindering economic activities, particularly investments.
For instance, we are making significant progress on the 147-kilometer commuter rail connecting our technology industrial sites in Calabarzon (Cavite-Laguna-Rizal, Batangas and Quezon), south of Manila, to Clark Airport, north of Manila. Other noteworthy projects are in other parts of the country in transport infrastructure.
Future of work
Another attractive aspect of investing in the Philippines is our commitment to develop a skilled workforce. Preparing our workforce for the future is crucial, as we encourage employers to upskill workers while also recognizing the importance of aligning our learning systems with learning institutions. With close to 800,000 Filipino graduates annually, companies should find recruiting our intelligent, young, tech-savvy and productive workforce promising. Note that our country has a large and young population, which is a significant attraction to many foreign investors. We have the youngest population in our region. The developed countries have an average age of 40s and high 30s, while we have less than 24 years old in median age.
For example, we support the Advanced Manufacturing Workforce Development Alliance (AmDev) launched recently by the United States Agency for International Development, which I attended. This five-year, P622-million partnership with Unilab Foundation aims to train Filipino workers to meet the evolving demands of the manufacturing sector. We also support AmDev’s goal of improving the capacity of our education system to develop human capital in line with Industry 4.0 requirements.
Investors, especially foreign investors, are crucial in accelerating the Philippine economic development. We aim for them to recognize the potential of our country and support in making our country grow, in our investment landscape. We encourage them to invest in our priority clusters for industrialization, and we pledge to support them as they capitalize on our reforms. Our continuing message and invitation to investors remain steadfast: make it happen in the Philippines. —Contributed INQ
(This was lifted from the keynote speech delivered at the Department of Trade-Board of Investment-Management Association of the Philippines Forum on April 19.. The author is Trade Secretary and a past president of MAP. Feedback at [email protected]).
