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$5.5B earmarked to revive manufacturing in Philippines
Publication Date : 04-08-2014
The administration of Philippine President Aquino has proposed to allocate 239.8 billion pesos (US$5.5 billion) for the Manufacturing Resurgence Program, aimed at enhancing the local manufacturing sector.
According to the published 2015 budget message of President Aquino, the administration “will rebuild the existing capacity of industries, strengthen new ones, and maintain the competitiveness of industries with comparative advantage. The goals: close the gaps in the supply chain, provide access to raw materials, and expand domestic markets and exports.”
“The administration will likewise build up agriculture-based manufacturing industries that generate employment, and support small-holder farmers and agri-cooperatives through product development, value-adding, and integration to big enterprises for marketing and financing purposes,” it added.
The Manufacturing Resurgence Program is aimed at raising the contribution of the sector to 30 per cent of gross domestic product by 2020.
It also called for a comprehensive menu of reforms that would have to be implemented not only by the Department of Trade and Industry, but by other agencies as well, since the constraints that hamper the growth of the manufacturing sector included power (supply constraints and high electricity rates), smuggling, and logistics and weak infrastructure, the trade agency said.
Last year, the Philippine manufacturing sector grew by 10.5 per cent (based on constant prices), nearly double the growth rate of 2012 of 5.4 per cent, Roberto F. Batungbacal, chair of the manufacturing committee at the American Chamber of Commerce and Industry (Amcham), earlier reported.
Meanwhile, the proposed budget for the DTI for 2015 was slashed by almost a fifth (or 19 per cent) to 3.178 billion pesos from this year’s budget of 3.928 billion pesos, government data showed.
Despite the reduction, the DTI continued to bat for improvements in its targets.
For instance, the DTI is looking to increase the percentage of MSMEs (micro-, small- and medium-sized enterprises) assisted to 15 per cent of the total number of MSMEs in manufacturing, retail trade, construction and services sectors, from 14.68 per cent.
It is also targeting for the Philippines’ average export growth to be greater than or equal to that of other Asean countries such as Thailand, Indonesia and Vietnam.
The DTI is also looking to enhance the level of consumer awareness to 72 per cent from 66 per cent; increase by 5 per cent the total approved investments of foreign and Filipino nationals; and to raise the share of the manufacturing sector to the GDP to 23.5 per cent in 2015 from the current 23 per cent.