ADB: Philippines need to boost manufacturing to reduce poverty

by: Deng Shasha

MANILA, May 2 (Xinhua) -- The Philippines will remain vulnerable to rising poverty and global economic shocks unless it can diversify its exports and expand its manufacturing base, the Asian Development Bank (ADB) said on Wednesday.

ADB President Haruhiko Kuroda said the country's manufacturing sector is dependent on the production of electronics, and diversifying the manufacturing sector will create more jobs and promote inclusive growth.

"Widening the manufacturing base beyond electronics will create much-needed jobs, promote inclusive growth and help reduce the persistent poverty," Kuroda said in a speech delivered at the opening of the bank's 45th Annual Meeting of Governors.

He added that the Philippines also need to diversify its export markets, with emphasis on emerging economies outside of East Asia, to keep it resilient amid global economic downturn.

Kuroda said the Philippines has the potential to become a key production hub in the region. This is mainly due to its educated workforce and rich natural resources, which are among the reasons why interest among foreign investors is growing.

He said developing its industry sector and modernizing services, the Philippine economy will be able to create more jobs for more Filipinos, whether they are low-, medium-, or high-skilled workers.

"By fully exploiting its favorable demographics and strategic location in the heart of Asia, the Philippines can transform its economy to one of sustainable and inclusive growth that benefits all," Kuroda said.

In a separate briefing, Philippine Trade Secretary Gregory Domingo said the government is targeting to raise the share of the manufacturing sector to the country's economy to 20 percent from the existing 14 percent in 10 to 15 years.

Domingo said "it makes sense" to develop the country's industrial base particularly since consumer spending remains as a major growth driver for Philippine economy.

The services sector now account for 54 percent of the country's GDP while agriculture accounts for 32 percent. The manufacturing sector only makes up 14 percent.

Domingo said the government needs to solve the power problem. This will make the Philippines more attractive to prospective investors in the manufacturing sector.

Domingo noted that the Philippines has comparative advantage in ship building and food processing.

(click here to view article) 

------------------------------------------------------------------------

Personal Reaction:

Philippines, through its strategic location-- in the heart of Asia, having all the natural resources to supply the needed raw materials for products, makes me, a Filipino proud and hopeful for the rise of the economy of my country. This country might be experiencing problems lately like the electricity, the "noynoy-ing" craze, poverty and a lot more. But if this country will just delve on the negative things that it is experiencing, I can safely say that this country will not experience progress.

The article that I have chosen is an eye- opener to the Filipinos that there is still hope in bringing this country on the rise. According to DBP, this country just needs a lot more manufacturing plants and bases that can lead to a lot of positive results for this country-- job opportunities, export marketing and other benefits. With the country's natural resources and it's strategic location, opportunities are very visible and the country is vulnerable for investments.

The article also mentioned that it would be great for the country to produce electronics. I think this is also a nice idea because the Philippines is not yet famous of producing electronics for export but some of the Filipinos have proven its quality by the cellular phones produced (e.g. My Phone, Cherry Mobile, Star Phone). With this new market strategy, it would open doors to investments and more demand for production if other countries would appreciate our newly- made local product.

The article also mentioned about the manufacturing sector having the least percentage in contributing to the country's GDP. With the opportunities given to the eager Filipino people to work and lift their financial conditions plus the natural resources naturally bestowed unto us plus the beautiful location of the country perfect for export, what else would this country ask for and what else could I be proud of? And it is now safe for me to really say "I am lucky to be in this country. I should not only think of the problems but also the opportunities given to me and my fellowmen."