Revival of mfg sector seen to generate 4-M jobs by ’22

MANILA, Philippines - The manufacturing sector could create four million new jobs by 2022 if the government works with investors to revive low-cost labor-intensive industries as well as expand production of high-value goods, foreign and local business groups said.

In a policy brief titled Manufacturing: Creating Millions of Better Jobs, foreign and local business groups said the creation of four million new jobs in the manufacturing sector would involve generating an average of 500,000 new employment per year starting 2015.

Roberto Batungbacal, Samahan sa Pilipinas ng mga Industriyang Kimika (SPIK) president and co-author of the policy brief, said in a press conference yesterday that by creating 500,000 new jobs in the manufacturing sector per year,the share of the sector in the country's gross domestic product (GDP) should likewise increase from just 21 percent today to 25 percent by 2016 and 30 percent by 2022.

"The 500,000 target is not impossible but will require policy adjustments," he said.

He said the government has to take a two-pronged approach of reviving low-cost labor-intensive sectors such as food and beverages; garments; and furniture and toys, as well as expanding high value-added manufacturing which cover semiconductors; transportation equipment, and chemicals.

Among the core strategies being pushed in the policy brief to grow low-cost, labor-intensive manufacturing is the creation of the Domestic or Export Enterprise Zones (D/EEZ) in non-industrialized areas.

Such ecozones, the business groups said, should provide investors a menu of incentives including low-cost leases, electricity rates, and more attractive labor policies.

For high-value manufacturing, the policy brief cited that strengthening the following are critical: low-cost capital; access to technology; higher education; research and development; and industry integration.

"Country-branding of the Philippines as a talented, innovative, and creative manufacturer of high-quality products should also be undertaken," the policy brief noted.

To support both labor-intensive and high-value manufacturing, the policy brief said that undertaking reforms to address issues hindering the growth of the manufacturing sector would be necessary.

Among the policy issues that need to be addressed are the high electricity costs and concerns on power reliability; lack of infrastructure; foreign restrictions on land ownership; labor policy; human capital; red tape; weak planning; smuggling; and high corporate and personal income tax.

John Forbes, senior advisor of the American Chamber of Commerce of the

Philippines, Inc. (AmCham) and co-author of the policy brief said in the same event the Philippines has a huge window of opportunity to grow the manufacturing sector and create new jobs in the sector given its trainable English-speaking workforce, increasing domestic demand, the Philippine Economic Zone Authority's success in creating economic zones, improved international image and strong GDP growth.

"The Philippines has a window of opportunity to grow the manufacturing sector that we encourage the public and private sector to take advantage of," he said.

He said further steps need to be taken though such as completion of industry road maps, creation of high-level public-private task force to prioritize the reforms, amendment of apprenticeship law and identifying locations viable for the D/EEZs.

The policy brief was created based on roundtable discussions organized by the Joint Foreign Chambers which drew recommendations from other business groups as well as associations.

The groups which provided inputs to the policy brief include AmCham, Australian-New Zealand Chamber of Commerce of the Philippines, Canadian Chamber of Commerce of the Philippines, Chamber of Furniture Industries of the Philippines, Confederation of Garment Exporters of the Philippines, European Chamber of Commerce of the Philippines, Employers Confederation of the Philippines, Foreign Buyers Association of the Philippines, Garment Business Association of the Philippines, Japanese Chamber of Commerce and Industry of the Philippines, Korean Chamber of Commerce Philippines, Management Association of the

Philippines, Philippine Association of Paint Manufacturers, Philippine Chamber of Commerce and Industry, Philippine Exporters Confederation, Philippine Oleochemical Manufacturers Association of the Philippines, Philippine Plastics Association, Semiconductors and Electronics Industries in the Philippines, Inc. and SPIK.

Forbes said the policy brief would be submitted to the Office of the President and members of the economic cluster.