Outgoing Secretary Ramon Lopez (left) turns over the Department of Trade and Industry flag to new Secretary Alfredo Pascual during the turnover ceremony held at the DTI office in Makati City on July 1, 2022.
New Trade and Industry Secretary Alfredo Pascual announced he will consider World Bank’s proposal to prioritize three industrial sectors – industrial manufacturing and transport; technology media and telecommunications; and health and life sciences – stressing these have strong economic potentials.
In a speech at the DTI turnover ceremony from former DTI Secretary Ramon M. Lopez, the new DTI chief said he will seriously consider a recent World Bank study, which identified the three industrial sectors with the most potential in the country.
The three industrial sectors fall under the broad manufacturing program, which forms part of the top priorities Pascual has set out to do during his stint as DTI Secretary under the Marcos administration.
Under the manufacturing sector, Pascual said he will also focus on key industries such as electronics, aerospace, automotive, IT business process management, and minerals like copper. He vowed to look at filling the gaps in the global value chains, specifically in electronics and mineral processing.
In this regard, he cited the ongoing Comprehensive Automotive Resurgence Strategy or CARS Program, which provides timebound output or performance-based fiscal support for investments in motor vehicles and parts manufacturing.
“Our objective is to increase the local value added,” he said citing the huge contribution from the automotive sector to the domestic economy where more than 10 million units of two wheeled or three wheeled-vehicles are going to be replaced in the next 10 years.
He said this demand would provide a large enough market for domestic production of vehicles and the need for motorcycles parts and services.
The Philippines vast resources in metals, such as nickel and cobalt, which are key inputs for battery manufacturing and would come in handy in the production of new generation of automobiles using clean technology. He said the Philippines can be a vital part in the production and processing of products, parts and components using critical minerals available locally.
On pharmaceuticals, he encouraged companies to engage in contract manufacturing. He also called on the continued development of a center of excellence for the semiconductor industry.
Pascual cited the increasing in the establishment of data centers globally where the Philippines is seen as a destination for these projects. “The local data center markets have significant activities beginning last year with several players announcing their plans to develop facilities across the country. The Philippines is an attractive location for hyperscalers as the country tops social media and internet usage worldwide,” he said.
“Manufacturing is our guarantee of sustainable and inclusive growth for our country because manufacturing provides more stable and higher paying jobs. Manufacturing will remain the priority under my watch,” Pascual said.
“We will take the lead in positioning for success in the manufacturing sectors in which we possess strategic advantages and craft industry roadmaps in key industries and sectors with the most significant strategic importance and potential for massive job generation.”
By developing these sectors, he said, the country would be able to plug supply chain gaps as manufacturers will have access to raw materials and expand domestic production and export locally produced industrial items.
Aside from industrial manufacturing, Pascual said DTI will collaborate with the Department of Agriculture to build agricultural base for manufacturing industries to generate employment and support smallholder farmers. He called on the need to integrate agricultural manufacturing with key industries for marketing and financing purposes.
Other priorities that Pascual vowed to pursue include support for micro, small, and medium enterprises (MSMEs), improving ease of doing business, priority investments and exports promotion, and pursuing more free trade agreements.
Pascual vowed to continue supporting the MSMEs, citing the sector as the backbone of the domestic economy, being the employer of 63 percent of the country’s workforce and accounting for almost half of the nation’s gross domestic product.
“We want our small businesses to be driven by science, technology and innovation to meet changing market demands for quality new products, we want them to embrace digital transformation,” he added.
On improving the ease of doing business, Pascual said he would push for further reduction of regulatory burdens, expanding the ease of doing business and in coordination with the Department of ICT.
For priority investments and expand exports, Pascual said DTI will push for the immediate ratification of the Regional Comprehensive Economic Partnership Agreement or RCEP.
He will also push for more trade agreements noting that the Philippines has the least number among the ASEAN countries that have signed FTAs with other countries to attract more foreign investments and expand trade.