Consumer demand seen to pick up

MANILA, Philippines - This year will be a good year for the manufacturing industry as consumer demand is expected to go up, according to Trade and Industry Undersecretary Cristino L. Panlilio.

“The manufacturing sector is very good because the demand is growing which was a result of all the investments that came in last year,” Panlilio explained.

The Board of Investments (BOI) recently reported a 22-percent increase in registered investments for 2011 to P368.9 billion from the P302 billion registered in 2010, while the Philippine Economic Zone Authority (PEZA) reported a 41-percent increase in investments to P288.34 billion in 2011 compared to the P204.395 billion recorded in 2010.

Panlilio noted that the investments are creating economic activity.

“These activities are creating jobs which are adding to the purchasing power of the consumers,” Panlilio said.

According to the DTI official, investments create jobs and employed people have the capacity to buy goods which will create fresh demand.

“Naturally goods will have to be made which will fuel the manufacturing sector,” Panlilio said.

Panlilio conceded that some of the demand may be met by imported products, but the domestic industry will also flourish.

Panlilio acknowledged that “importing also creates economic activity, so it is still good for the country.”

Looking forward this year, Panlilio said they expect more investments in the Public Private Partnership (PPP) program. 

Big ticket investments, Panlilio said, would further fuel economic activity.

However, Panlilio noted that the Philippines must upgrade its technical prowess in order to come up with better products.

“In order to compete in the manufacturing sector, the country must upgrade its technical prowess,” he urged.

Panlilio explained that the Philippines must not be content with only providing raw materials.

The products made here, Panlilio stressed, must be more sophisticated so that it can go head to head with items produced in other countries.

The Philippines, likewise, Panlilio said, should expand from just producing raw materials to actually assembling finished products.

This is especially true for the electronics sector which currently exports its production, Panlilio cited.

“Instead of sending semiconductors, we can put up a facility here to assemble the finished products,” he said.

Another example he cited involves Philippine -based companies who currently only make parts and specific components of aircrafts doors.

What should happen, Panlilio said, is for Philippine companies to produce the components and assemble the entire aircraft door here.