The Department of Trade and Industry insists that private sector-led roadmaps will save this country and bring inclusive and sustainable economic growth to this nation. Here is a case where too much laissez-faire can actually kill the cow.
Once again, our government bureaucrats are content to just wait for business to lead the way. In the case of this most recent roadmap-solicitation series, they have just gleefully let out of the bag that there are almost a hundred sectors that have signified their intention to submit a medium- and/or long-term plan.
Unfortunately, it’s not the numbers that really matter in this exercise.
Admittedly, as the DTI has announced, the first sectors that have prepared and submitted their roadmaps will have a significant bearing in resuscitating our long-neglected manufacturing sector.
The chemicals and copper sectors, including existing and potential companies that would want to see fiscal and non-fiscal incentives thrown their way, are being expansive about how they plan to contribute to the country’s economic growth.
Once again
Once again, with more feelings, the copper sector has proposed to build a fully integrated industry that covers both the mining and manufacturing sectors. By 2030, the interested stakeholders of this sector are saying that the share of a resurgent copper industry will contribute to two percent of the GDP from the current 0.2 percent.
The long-term plan starts with the development of two world-class copper mines, welcoming investors to establish copper wire rod casting plants and copper wire rod facilities. For this, the promise is to grow the industry into the country’s third biggest export sector, with annual exports of $30 billion by 2030.
Some kind of inclusive growth will be expected then with the establishment of more downstream companies that will develop new copper products, such as those that will be able to manufacture automotive wiring harnesses for local and export sales.
Copper’s final products are essentially inputs in the manufacture of end-user goods like cars, mobile phones, computers, valves, and electrical materials, among others.
Incomplete picture with lots of promises
Currently, the copper sector is largely mining-and-export oriented, with four mines actively producing concentrates.
The actual production of copper, its transformation and further processing of semi-finished products into components for end-user goods comprise the product segment of the industry. With recent high copper prices, the sector has seen a jump in export earnings to about $1.5 billion in 2011.
From the roadmap presentation, exports of copper products alone, excluding concentrates and cathode, are targeted to grow 15 percent annually and should be able to reach $2.45 billion by 2030. This means that the mining sector will still contribute the lion’s share of $27.5 billion by then.
Just exactly what and how much the sector will need to forge ahead with its proposed roadmap are still unclear. In the end, what we get is an incomplete picture, albeit one that promises the moon and the stars.
More jobs at chemicals sector
The chemicals sector is also looking at $30 billion worth of exports by 2030.
While the copper roadmap talks about big investments and few jobs, the chemicals master plan charts growth for about 1,500 manufacturers responsible for the employment of about 150,000 people in the chemicals, petrochemicals, plastics, paints, inks and oleo-chemical sub-sectors.
Chemicals also has a huge impact in reviving the country’s manufacturing sector since it plays an important role in over 90 percent of all manufactured products in the country.
In terms of income generation, the chemical master plan states that the combined chemical imports and domestic production output of the chemical industry is estimated at about $14 billion, or around 6.7 percent of Philippine GDP.
On the other hand, chemical trade imports continue at a robust pace, growing 13 percent annually, with exports increasing by 17 percent yearly. Domestic production in 2009 contributed P330 billion in gross revenues, or by seven percent yearly.
The industry stakeholders are quite bullish about the chemical sector’s role in the country’s future, especially now that economic growth has been so upbeat for more than a decade. The sector aims to be a leading exporter of chemical products in the region by 2022; and to the rest of the world by 2030.
Just what kind of help the chemical sector needs to achieve its aspirations was not also clearly enunciated. But since there was no mention of putting up a petrochemical plant, the industry clearly is looking at downstream industries that will manufacture finished goods to sell locally and outside the country.
Too late
Two down, and dozens more to be presented. By the time all of the roadmaps are all bared, there will be quite lot of materials that will need to be scrutinized. Another three years perhaps before we hear of something definitive from our bureaucrats?
Oops, too late. There’s a new president, a new administration. And we all know what follows next.
A reader’s lament
So meanwhile, for our parting quote, let’s just hear from a reader who requested anonymity. Here goes.
“I think there’s a need to scrutinize DTI’s plan. Based on what I heard from a friend from DTI, they are just busy recycling the old plans that they have just to complete the roadmap. Sa madaling sabi, hindi pinag-iisipan.
“This concern coincides with Mr. Rey Gamboa’s observation (Roadmap’s disappointments, August 8, 2013, Philippine Star (www.philstar.com/business/2013/08/08/1063711/roadmap-disappointments).
“DTI needs technical help on this, possibly from NEDA and other planning agencies. The country needs a cohesive and technically feasible plan (and doable) in order to compete against the emerging countries such Vietnam, Cambodia, Burma and Laos.
“I excluded the traditional country-competitors such as Singapore, Malaysia and Thailand. Masyado nang malayo!â€
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