Manufacturing Industry Roadmap - PIDS AdminStructural Transformation & industry upgrading inclusive...
Transcript of Manufacturing Industry Roadmap - PIDS AdminStructural Transformation & industry upgrading inclusive...
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12TH DEVELOPMENT POLICY RESEARCH MONTHADDRESSING THE JOBS CHALLENGE TOWARD INCLUSIVE GROWTH
The Philippine Manufacturing Industry Roadmap
Agenda for New Industrial Policy, High Productivity Jobs and Inclusive Growth
Rafaelita M. Aldaba
28 August 2014
PHILIPPINE INSTITUTE FOR DEVELOPMENT STUDIES
NEDA SA MAKATI BUILDING
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Structural Transformation & industry upgradinginclusive growth
800K new entrants/year 3M unemployed ; 7.3M underemployed Services cannot provide all the needed jobs Manufacturing can employ skilled, semi-skilled, unskilled
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Value Added Employment
average growth average share average share
80s 90s 20s 80s 90s 20s 80s 90s 20s
GDP 1.7 3.0 4.7 100 100 100 100 100 100
AGRI 1.1 1.8 3.0 23.9 20.8 18.9 49.6 43.2 36.1
IND 0.3 3.0 4.2 38.0 34.1 33.1 14.5 16.0 15.1
MFG 0.9 2.5 4.1 26.3 24.3 23.7 9.9 10.0 9.1SER 3.3 3.6 5.8 40.4 42.4 48.0 35.9 40.9 48.8
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Strategic Industrial Policy
Globalization/regional economic integration AEC 2015 Global/Regional Production Networks
Productivity/competitiveness crucial
New industrial policy Remove obstacles to growthInvestments Efficient use of existing capacity & expansion Deepen participation in regional production networks
New Industrial policy: coordination/facilitation, creation of proper environment for private sector development
Government: not proximate cause of growth, but private sector, investment & entrepreneurship
Create environment to strengthen industries, ensure they are not disadvantaged by international competitors
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Roadmap for Structural TransformationVision: globally competitive manufacturing
-Rebuild capacity existing industries, strengthen emerging industries, maintain competitiveness of comparative advantage industries
-Participate as hubs in regional & global production networks for auto, electronics, machinery, garments, food
-Shift to high value added activities,investments in upstream industries -Link & integrate industries-SMEs & large enterprises
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Phase I 2014-2017
Phase II 2018-2021
Phase III 2022-2025
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Strategic Actions, Complementary Measures
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30% value added; 15%
employment
Horizontal measures
Coordination mechanism
Vertical measures
• Close supply chain gaps• Expand domestic market
& exports• HRD & skills• SME development• Technology upgrading,
innovation
• Investment promotion
• Power, smuggling, logistics & infrastructure
• Competitive exchange rate
open trade regime, sustainable macro policies, sound tax policies & administration,efficient bureaucracy, secure property rights, institutions that promote adaptiveresearch & patent regime, access to finance & technology for SMEs
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Strategic Actions: Manufacturing
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STRATEGIC ACTIONS
Close Supply/Value Chain Gaps
Copper Institutional mechanism to fully integrate the industry
Furniture Supply hubs for raw & natural materials
Tool & die Access to raw materials, equipment, & software
Paper Fiber raw material base, develop massive tree plantations, commercial agro forestry with virgin wood pulp production
Iron & steel
Full integration of industry upstream-mining, reliable supply of iron ore & coal
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Expand domestic market, exportsAuto: heart of the manufacturing roadmap
• Complex product, 30,000+ parts & components, different production processes: large multiplier effect
• Auto investments: foundation for broad-based industrial growth• Integration into global production networks
Basic Industries
Parts & Components Manufacturing
Vehicle Manufacturing
Auto Supporting Industries
3rd Tier Supplier
(Raw
Materials)
2nd & 1st Tier Supplier(Intermediate & semi-
finished)
Mining
Iron & Steel
Petrochemicals
Textile
Machinery & Equipment, Dies & Moulds, Metal Stamping, Die Casting,
Machining
Rubber
Chemicals
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Vertical ConstraintsMain Issues & Constraints DTI-BOI actions
• Absence of raw materials (upstream); weak parts & components sector (mid-stream); downstream
• Roadmaps, TWGs as venue for discussions & policy interventions
• Lack of economies of scale, build on domestic supply base
• Auto Program
• Access to finance, technology upgrade, inability to comply with product standard regulations
• Credit Bureau, BSP Credit Surety Fund
• DTI-SMED Council
• Lack of skilled workers, training • DOLE, TESDA, CHED
• Industry-academe linkages new product development, R&D
• DTI Research Consortium, government-academe-industry partnership
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Type Sectors
Design, tool making, prototyping, molding, die casting
Auto parts, Tool & Die
Chemical engineering, Materials Engineering
Chemical, Rubber, Plastics
Supervisory, managerial, productivity Furniture
Foundry technology, Metallurgical, Mechanical, Industrial, Metal casting Engineering
Metal casting
Die design, Tool & Die Engineering Tool & Die
Vocational trainings (TESDA) Iron & steel, Furniture
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HRD & Skills Trainings
COOPERATION WITH TESDA, CHED IS CRUCIALDOLE: labor policies to facilitate movement from low
productivity to high productivity jobs
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Horizontal Constraints Main Issues & Constraints Actions
• High cost & unpredictability of power• High cost of domestic shipping
• IPP preferred list, DOE coordination
• MARINA, PPA
• Smuggling, corruption, bureaucracy• Lack of streamlining/automation of
interrelated business procedures• Lack of policy consistency,
transparency, & predictability• Permits issued by LGUs, national
agencies • Lack of competition law• 60-40% foreign equity rule
• BPLS, NCC• Industry Technical
Working Groups
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Roadmap Status
• Industry Development Council: draft EO submitted to OP
• Manufacturing Resurgence Program
• Regional Roadmaps
• Research Consortium
• Comprehensive National Industrial Strategy
Status Industries
Completed Aerospace, auto, biodiesel, ceramic tiles, chemicals, copper, e-vehicles, electronics, furniture, iron & steel, petrochem, plastics, tool & die, rubber, pulp & paper, motorcycle, natural health products, metalcasting, shipbuilding
On-going Processed fish, meat, chocolates, condiments, carageenan, processed shrimp, mangoes, IC design
Industry Roadmaps: moving up the value chain, productivity
Government as coordinator & facilitator productivity, skilled workers, technology, regulations, infra
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We cannot leapfrog industrialization, we need to upgrade & transform our industries not only for inclusive growth but in
preparation for AEC 2015.
For comments/suggestions, email me at
[email protected] YOU!