EDITORS DESK
BERNIE CAHILES-MAGKILAT
The former President Ferdinand E. Marcos had a vision for an industrialized Philippines. With that, he ordered in 1979 the development of at least 11 big industrial projects.
These projects include copper smelting, integrated steel production, an aluminum smelter, diesel engine manufacturing, phosphate fertilizer, integrated pulp and paper mill, cement industry expansion, coconut industry rationalization for the manufacture of coconut fatty alcohol as feedstock for biodegradable detergents, integrated pulp and paper mill making the Philippines the only newsprint plant in southeast agency, downstream petrochemical plants, heavy engineering industries to include a foundry to make large castings, a huge forge and a fabricating equipment, and alcogas, a nationwide program for the production of a mixture of 20 percent alcohol and 80 percent gasoline to run motor vehicles using sugar as primary raw material.
At that time, history says, the Philippines experienced an economic boom and Marcos occupied a leadership role among neighbors in Southeast Asia.
From any angle, whether you are a pro or anti-Marcos, it was brilliant until Marcos, embroiled in politics, health and corruption issues, lost it.
In my years as business journalist covering the Department of Trade and Industry and its attached agencies, I had the chance to know a few of what could have been the remains of the Marcosian dream.
There was the changing of the guards at the National Steel Corp. before it totally lays in decay in the sprawling steel complex in Iligan. Correct me if I am wrong, but the Philippine Associated Smelting and Refining Corp. (PASAR), I believe, is the only real operational industrial firm left standing under the hands of foreign owners in Isabel, Leyte.
The integrated pulp and paper mill or the PICOP is now a lost vast jungle in Bislig, Surigao. While we had the fertilizer scam, I wonder what happened to the Philippine Phosphate Fertilizer Corp. (PhilPhos). The last time I heard, its office was located at the Pacific Star building, the once most modern edifice owned by the Republic of Nauru at the corner of Buendia and Makati Avenue.
Not to disparage the next administrations following the deposed Marcos, but no one dared, really, or pushed hard enough, for the development of the domestic industries, much less protect it. Instead, government after government was drawn into the ease of imports with the advent of trade liberalization and globalization and into the services sector.
The Philippines became a popular haven for call centers and IT-BPM operations, the POGOs, and the exports of millions of Filipinos to work in the services sector overseas.
Now, here comes the officials of the DTI and the Board of Investments trying to adopt a more pro-domestic industries stance.
In bold moves, DTI Secretary Ramon M. Lopez started with some policy interventions. He has imposed safeguard measures against imported passenger cars and light commercial vehicles on efforts to revive the local automotive manufacturing industry and save jobs.
Lopez also imposed safeguard duty against imported cement to protect local manufacturers. He is also bent to continue protecting the country’s glass manufacturing, which could be the last and most integrated manufacturing operation in the country.
Amid the pandemic, the DTI launched a global campaign “Make It Happen in the Philippines”. This is to entice foreign manufacturers to invest in priority industries identified by the BOI.
This unified promotion campaign seeks to promote five key priority sectors that are seen to have the most potential for foreign investments even, in the medium to long-term, in a post-pandemic recovery scenario. These are automotive, aerospace, electronics, information technology-business process management (IT-BPM), and copper/nickel. These five sectors are the best performing sectors in the Philippines and needs government support.
In the automotive sector, the DTI has imposed safeguard duty on imported cars and light commercial vehicles. It has implemented the Comprehensive Automotive Resurgence Strategy to entice local car production by granting tax incentives to local motor vehicle production and automotive parts manufacturing.
Coupled with these are strict non-tariff measures like the imposition of mandatory inspection and certification on certain imported commodities to ensure the quality and safety of these products. While mandatory inspection and certification is aimed at protecting consumers and legitimate producers, these are also import deterrent.
The new investments promotion strategy for the five priority sectors aims to address the value chain gaps and further the growth and competitiveness of Philippine industries, and strengthen the country’s position as an investment destination of choice in the Southeast Asian region.
In addition, the much-vaunted new CREATE Act, a game changer law that offers tailor-fit fiscal and non-fiscal incentives to the right kind of investments in the country, is expected to encourage more investments in these priority sectors.
The current DTI/BOI strategy is the first palpable attempt at reviving domestic industries. Whether or not this is just another epic failure in the making will all depend on our leaders and the kind of leaders this country will have in the future. Make it happen in the Philippines this time.
(The author is the assistant Business Editor of Manila Bulletin.)