Phl urged to invest heavily in education

MANILA, Philippines - The Philippines, which is heavily reliant on the services sector for gross domestic product (GDP) input should invest heavily in education to equip its robust and young workforce with the skills to sustain the growth of its business process outsourcing industry. At the same time, it should also determine growth opportunities for manufacturing.

During the Asian Development Bank (ADB) forum titled Taking the Right Growth Road – Manufacturing and Modern Services, delegates agreed that Asia, a rapidly growing region is powered by an educated workforce and an expanding manufacturing sector led by China.

Panelists in the forum believe that Asia, a rapidly growing region, has the potential to achieve a 25 percent economic growth in 2015, ushering in an “Asian century.” For this to happen, however, Asian economies should continue to invest in education and technology.

ADB President Haruhiko Kuroda said Asia’s current growth rate of only 6.9 percent is “still a vibrant growth” that can be sustained considering that the region “has become resistant to external financial shocks.”

In an interview on the sidelines of the ADB annual governors’ meeting, Trade Secretary Gregory Domingo said the Philippines targets to grow the contribution of the manufacturing sector to total GDP from 12 percent to 14 percent within 10 to 15 years.

Services currently account for 54 percent of the country’s GDP and agriculture 32 percent.

The local BPO industry is expected to grow to $25 billion by 2016 with a workforce of 1.3 million.

A lot of comparison has been made between the Philippines and India in respect to the development of the BPO industry. Both countries have a large population as well as a “tradition of elite education and diaspora.”

Shinji Asanuma, Professor Emeritus, Hitotsubashi University and Senior Advisor of JICA, said both countries have to address “deficient infrastructure” to sustain growth in the BPO sector.   

On the manufacturing side, Francois Bourguinon, director at the Paris School of Economics, noted that manufacturing in the Philippines has gone down because of competition and globalization, hence the need to make it “input oriented” like China has done.

During the forum, Socio-economic Secretary Cayetano Paderanga Jr. said the government is currently working on industrial roadmaps and increasing its spending on infrastructure to revive the manufacturing sector.

“We are lucky in the sense that BPO and IT (industries) are available and has given us resources to enable us to fill in the gaps. We are lucky that now we can work on governance issues and believe that this is a strong platform from which we can take off,” he said.

Panelists concluded that Asian economies that have already established an advantage in the services sector should not neglect the development of manufacturing to attain inclusive growth through job production to a wider segment of workers.