Waiting for transformation at the DTI

When Secretary Cristina Roque took the helm of the Department of Trade and Industry (DTI), she inherited an economy navigating global fragmentation, high inflation, and intense competition for foreign investments from within ASEAN. It was never going to be easy. To her credit, she approached the job with enthusiasm, accessibility to business groups, and a clear bias toward MSMEs. But gaining competitiveness is not measured by enthusiasm. It is measured by transformation. And on this count, her record remains deeply wanting.

Let me begin with what she has done well.

Secretary Roque has been active and engaged. She has strengthened support for micro, small and medium-scale enterprises (MSMEs), expanded their access to financing through SB Corp, and promoted franchising as a vehicle for job creation. Digital platforms and trade fairs have been pushed to help small businesses reach wider markets. In a country where MSMEs account for the vast majority of enterprises, this focus is understandable and politically important.

She has also sustained trade diplomacy. The operationalization of the Philippines-South Korea Free Trade Agreement reinforced bilateral market access. Discussions toward a possible free trade agreement with Canada have continued (and should be ratified). She has also expressed interest in larger trade arrangements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), while remaining engaged in regional agreements like the Regional Comprehensive Economic Partnership (RCEP). These efforts show that the DTI recognizes the need to keep the country integrated into global trade networks. At a time when protectionism is rising in many parts of the world, maintaining an outward-looking trade posture is a positive signal.

Competitiveness

But trade agreements and MSME programs alone do not transform economies. Competitiveness does. And to be competitive, the DTI must confront such issues as the ease and cost of doing business, cost of manufacturing, workforce productivity, and industrial upgrading, among others. And on these fronts, Secretary Roque has not made much of an impact (yet).

The same impediments to industrial growth that have hounded the country for decades still fester today. Lamentably, the DTI (nor the Marcos government as a whole) has not confronted these issues with success. In fact, under this government, national competitiveness has not improved. Our competitiveness ranking is shamefully the lowest among the ASEAN 6 at 51st place among 69 economies.

The impediments I am referring to are as follows: Electricity prices are among the highest in the region. Logistics costs remain elevated, particularly inter-island shipping. Port congestion and regulatory bottlenecks persist. And, of course, corruption. Beyond talk, there has been no detectable progress in resolving these issues once and for all.

To be fair, solving these issues requires a whole-of-government approach. This should be driven by the President himself. But we all know his limitations. So it falls on the DTI to lead an aggressive campaign.

On manufacturing and industrial policy

Manufacturing is not surging – it is stagnating. Philippine exports have shown little progress in moving up the value chain, with limited gains in complexity or diversification. Even as geopolitical tensions pushed billions of dollars in investment into ASEAN, the Philippines has failed to capture its fair share. Other countries have aggressively positioned themselves as hubs for electronics, renewable energy components, and advanced manufacturing. The DTI, however, has yet to clearly define which industries the Philippines can truly compete in – and back it with concrete policy support.

Truth is, Secretary Roque has no visible industrial strategy. The country needs clear plans to upgrade key sectors like semiconductors, green technology, advanced electronics, food manufacturing, and EV components, etc. The country needs to define its flagship industries as its next growth engines.

This is even more worrying in light of the impact of artificial intelligence on the IT-BPO sector. For two decades, IT-BPOs have been a major source of exports and jobs. But AI threatens to automate many of these roles. While neighboring countries are moving into AI development, advanced analytics, and higher-value digital services, the DTI has no detectable national strategy to prepare for the AI revolution. No large-scale re-training plan for BPO workers, no strong push to attract AI investments, and worse, no clear replacement growth engine for IT-BPOs. Without a decisive pivot, the Philippines risks falling behind in the digital economy.

Neither has the DTI built a strong innovation ecosystem that truly supports startups. Regulatory hurdles, weak venture capital incentives, and limited R&D support persist. Without bold reforms to attract tech investment and nurture start-ups, the Philippines risks missing out on today’s global innovation boom.

Too, there is little progress in green competitiveness. As global markets tighten sustainability requirements and carbon standards, countries are positioning themselves as destinations for clean technologies and low-carbon manufacturing. The DTI has yet to present a clear, widely communicated green industrial roadmap backed by policy.

Need for transformation

Secretary Roque is clearly enthusiastic. But she has not been an agent of transformation. The Philippine economy needs more than incremental improvements in MSMEs. It needs bold industrial bets, aggressive cost-reduction reforms, and a forward-looking innovation strategy that anticipates technological disruption rather than reacting to it.

In a region racing ahead, maintaining the status quo is equivalent to regression. The Philippines has talent and demographic advantages. What it lacks is a decisive competitiveness that can push these strengths into industrial momentum.

The question is not whether the DTI has been active. It has. The question is whether that activity has translated into structural gains in productivity, manufacturing depth, and innovation capacity. On that demanding measure, the results are limited.

Sec. Roque’s time to implement genuine industrial transformation is narrowing. The time has come to earnestly focus on competitiveness breakthroughs. Without it, the Philippines risks watching the next wave of growth pass it by yet again.

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Andrew Masigan’s e-mail address is [email protected]. Follow him on Twitter @aj_masigan