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World Bank urges Philippines to cement place in industrial, tech and health value chains

World Bank urges Philippines to cement place in industrial, tech and health value chains
REUTERS

THE PHILIPPINES must establish its niche in the global value chains for manufacturing, technology, and health and life sciences, the World Bank said.

At the launch of its Global Value Chain report on Thursday, the World Bank said the Philippines has three areas it may elect to focus on: Industrials, Manufacturing, and Transport (IMT); Technology, Media, and Telecommunications (TMT); and Health and Life Sciences (HLS).

“The Philippines is coming from a position of advantage but the challenges are steep. It is a world leader of the voice sector in the business process outsourcing (BPO) industry, as well as known for (expertise in) electronics and components. It is globally regarded for its skilled nurses, seafarers, and a vibrant labor force,” Cecile Thioro Niang, a practice manager for East Asia and the Pacific for the World Bank, said at the event.

“These comparative advantages must be fully capitalized and utilized to advance the country’s GVC (global value chains) participation. These are challenging times with the rise of automation and artificial intelligence, the use of services in manufacturing, and the increasing regional concentration of goods production,” she added.

The World Bank said every percentage point increase in GVC participation raises gross domestic product per capita by more than one percent via increased exports and poverty reduction.

“One key area is really talent and skills. There is a need to really scale up the efforts and bridge the gap between what the system produces and what the industries need,” Ndiamé Diop, World Bank country director for Brunei, Malaysia, the Philippines and Thailand, said during the event.

In a separate note, Mr. Diop added that “countries that embrace GVCs are able to leverage their strengths in specific tasks and roles in manufacturing and services and export at scale, enabling them to sustain growth, create more jobs, and reduce poverty faster.”

Souleymane Coulibaly, the World Bank’s program leader for Brunei, Malaysia, the Philippines, and Thailand, said: “The Philippines’ post-COVID recovery could benefit from a configuration of its leading exports… IMT can build on the country’s strong position in electronics parts and components.”

“TMT can build on the country’s strong position in IT-BPO (Information Technology – BPO) and HLS can build on the country’s skilled healthcare professionals, pharma sector, and emerging telehealth sector,” he added.

Trade Secretary Alfredo E. Pascual said the Department of Trade and Industry (DTI) has adopted these recommendations, but notes that it has added another focus area, Modern Basic Needs and Resilient Economy.

“In terms of policies to make the Philippines an attractive destination for foreign direct investment (FDI), we are implementing recently passed laws that either ease foreign ownership restrictions or incentivize investment,” Mr. Pascual said, referencing the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, as well as amendments to the Public Service Act, Foreign Investment Act, and Retail Trade Liberalization Act.

“Specifically, on CREATE, there are a lot of elements aligned with enhancing the GVC competency of the Philippines,” Juvy C. Danofrata, the head of the Fiscal Incentives Review Board Secretariat, said.

“We really encourage participation and partnership with the private sector in order to further make the Philippines more competitive,” she added. — Diego Gabriel C. Robles

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