Services industry urged to move up the value chain

The Department of Trade and Industry is urging the services industry—including companies in the information technology, business process outsourcing, tourism and transport services sectors—to move up the value chain so that the country can boost its service exports.

“There is great potential in terms of human capital and the unbundling of sub-sectors of the IT-BPO industry for more specialized services in the legal or medical fields, for example. We have to be more creative in positioning ourselves as a total global services destination beyond outsourcing services alone,” Trade Undersecretary Adrian Cristobal Jr. said in a statement issued Tuesday.

He urged greater cooperation between the government and the private sector to ensure that the country would have a continuous supply of qualified manpower to support expansion into higher-value services.
“One of the urgent tasks for the country is to develop human capital needed to fill the hundreds of thousands of jobs that the services sector will need every year. The demand for skilled workers, supervisors, middle managers, and a wide array of knowledge workers in various disciplines and complex services will continue to rise,” Cristobal said.

“The services industry is a strategic driver of our growth and development, and we will continue to work with the private sector to further tap into the potential of the whole services industry and nurture our country’s rich human capital,” Cristobal added.

Under the latest Philippine Export Development Plan, the services industry is envisioned to grow by 24 percent in 2016.

Around 10 years ago, services accounted for only 9 percent of the country’s overall exports. As of last year, however, the contribution of services to total exports had risen to 28 percent, growing by an annual average of 12 percent.

The country has been a net exporter of services since 2006, with the bulk of our service exports coming from the IT and BPO space.

The DTI’s call to expand to higher-value services to boost service exports is part of the strategy to diversify the country’s exports, following the impact of the Japan crisis on the Philippines’ top merchandise export, electronics.

Trade Secretary Gregory Domingo said the country’s exports were now increasingly diversifying, cushioning the impact of the Japan crisis on total exports.

He related that electronics usually accounted for around 75 percent of the country’s export receipts.