Services trade to help create growth sources, jobs – NEDA

CEBU, Philippines – The vital role of services trade in global value chains must be maximized, said the National Economic and Development Authority, noting it can potentially create new growth sources and jobs for Philippines and the entire Asia-Pacific Economic Cooperation region.

"We would like to see greater participation of services in various GVCs that will increase productivity and add value to goods produced. In the process, these will create more jobs and make growth more inclusive," NEDA quoted its deputy director general, Emmanuel Esguerra, as saying during the joint meeting of APEC Group on Services and Market Access Group (GOS-MAG) in Cebu City recently.

In a research paper on APEC 2015, the Philippine Institute of Development Studies explains value chain as "the full range of activities that firms and workers perform to bring a product from its conception to end use and beyond..."

According to Esguerra, GVCs now account for more than 50% of global trade.

"The significant role of GVCs in international services trade creates a sense of urgency to make the services sector more competitive. So it's very important for us to do further analytical work in the area," Esguerra noted.

The joint meeting presented studies on how select Apec economies opened markets for services in specific sectors to benefit from participation in GVCs.

The NEDA official explained there is a need to understand how economies can maximize GVC participation and how APEC can create a policy environment conducive to the growth of services value chains.

He further said the Philippines can take advantage of the passage of the Competition Act "to boost its services value chains and attain a more productive, innovative and competitive services sector."

The Philippine Competition Act prohibits anti-competitive agreements between or among competitors and creates a level playing field among businesses.

Policy reforms are needed to establish better business environment for services trade and thus increase its growth potential.

The services sector is the Philippines' largest economic growth driver and account for more than of the country's total employment.