Trade and Industry Secretary Alfredo E. Pascual has called for industry development as he joined Filipino exporters in raising alarm on the need for breakthroughs amid the country’s slow export performance versus its competitors in the region.
In a keynote address during the 2022 National Export Congress with the theme “Paving the way toward exporting breakthroughs”, Pascual acknowledged that while the country’s exports have been growing, it is still slower than most of ASEAN countries.
“It is clear that industry development is the only way we can deliver exporting breakthroughs,” Pascual said adding “We need to be faster to gain a bigger share of the opportunities in the global market.”
As chairperson of the Export Development Council, Pascual said “I am one with our exporters in raising the alarm on the need to pave the way toward exporting breakthroughs.”
In fact, Pascual said both public and private sectors are called on to work together to unlock the country’s unrealized export potential of $49 billion a year to achieve sustainable and inclusive industrialization.
Thus, Pascual said he is prioritizing four industry clusters to bolster the country’s export performance by pursuing an Industry Development Centric Approach to Export Development.
“We must transform the Philippine export sector into a globally competitive, sustainable, and agile industry,” he said.
Pascual, who used to be with the academe explained that industry development means addressing constraints to both scale and scope of production—particularly in innovation and value addition, human resource development, business environment, finance, and infrastructure. It means competing beyond pricing and amplifying the quality, value-addition, sustainability, and reliability of Philippine exports in the global market.
Industry development means reconfiguring our industries into export clusters. It is not simply identifying the priority industries and products to
promote but leveraging our existing capabilities and assets to maximize opportunities.
“It requires a shift in our mindset from just promoting existing products and services that we are currently good at to promoting and highlighting our CAPABILITIES. This mind shift opens a broader horizon of possibilities and opportunities,” he added.
This is the reason that his agency is undertaking a cluster approach to developing and promoting export priorities focusing on four clusters in consideration of the country’s competitiveness and
the shifts in the global value chains.
These clusters are Industrial, Manufacturing, and Transport (IMT), Technology, Media, and Telecommunications (TMT), Health and Life Sciences (HLS), and Modern Basic Needs, Resilient Economy (MBNRE).
The IMT cluster focuses on upgrading opportunities in aerospace, automotive, maritime, and
semiconductors such as maintenance, repair, and overhaul of aircraft. This cluster will also includes technology development on pollution reduction, green vehicles, IT in vehicles, and precision metal components, and improving skills in electronics R&D and helping improve business for firms in the outsourced semiconductor assembly and testing.
Notably, he said, the number one aircraft interiors company in the world (Collins Aerospace) and the world’s leading aircraft maintenance-repair-overhaul company (Lufthansa Technik) are headquartered in the Philippines.
On TMT cluster, he said this provides opportunities to digitalize services, hence allowing the IT-BPM sector to become a cross-cutting contributor to the competitiveness and efficiency of
the other global value chains. It also allows us to build a supportive environment for the development of the creative industries.
The HLS cluster is the platform for making the Philippines self-sufficient in pharmaceuticals, medical devices, healthcare services, and therapeutic systems.
Over the next decade, multinational companies will aim to manufacture medicines faster and cheaper. “The sector will also witness smaller, more agile pharmaceutical companies taking a more critical role in bringing medicines, including generics, to the market,” he said. As pharmaceuticals, medical devices, and healthcare services become more integrated, this facilitates the emergence of an HLS cluster in the Philippines.
The MBNRE cluster would ensure that agricultural development, food security, development of a green ecosystem, and sustainability and resiliency of the first three clusters.