Experts: Policy key to manufacturing boom

Aldaba said local industries were confronted by three challenges: intense competition from imports in the domestic market, the need to improve the capacity of domestic industries to penetrate export markets and global value chains, and the need to attract more investments.

To address these issues, Aldaba said the DTI is implementing the Inclusive Innovation Industrial Strategy or i3S, which aims to grow innovative and globally competitive manufacturing, agriculture and service industries, while strengthening their linkages in the global value chain. This will result in inclusive and sustainable growth that generates more opportunities for employment and entrepreneurship in the country.

“What we want to create is a dynamic industry ecosystem that focuses on embracing Industry 4.0 technologies, developing more innovative SMEs (small and medium enterprises) and startups, integrating production systems linking manufacturing with both agriculture and services, promoting research commercialization, upskill and reskill workforce and an enabling economic environment,” she said.

Priority sectors include food, agriculture, agribusiness, health, water, infrastructure, education, shelter, sanitation, green ecosystems, defense, security, integrated steel and textile, chemicals, plastic, green metals, water fabrication, energy efficiency, and renewable energy.

The DTI is developing a program called Securing Manufacturing Revitalization and Transformation to provide fiscal and non-fiscal support to industries that will adopt Industry 4.0 technologies.

Another component of the initiative is the artificial intelligence (AI) roadmap that will lead to the creation of a center for AI research for Industry 4.0 management and production technology training.

Aldaba said that the pilot factory will be likely built in Laguna or Batangas.

Seeing the lucrative potential in electric vehicle (EV) production, the DTI’s Electric Vehicle Incentive Strategy seeks to provide time-bound, targeted, performance-based and transparent fiscal and non-fiscal support to boost EV and EV parts manufacturing.

Under its initial proposal, a total of P30 billion fiscal support will be allotted for manufacturers of electric public utility vehicles, buses, trucks, 2- and 3-wheelers, passenger cars, batteries, auto electronics and charging stations.

The DTI also proposed a P53-billion fiscal support for buyers of e-jeepneys, motorcycles and tricycles.

“We are working with the academe in terms of conducting a feasibility study as to whether we have sufficient minerals and how we acquire the technology for us to manufacture the battery. We are looking at the entire value chain,” Aldaba said, adding the DTI estimated that the endeavor will create 100,000 jobs.

Aldaba reported that the manufacturing sector grew by 8.8 percent in 2021.

The growth was sustained this year with a 10.1 percent expansion in the first quarter.

Output expansion has also translated to significant job creation. As of April 2022, employment in the sector now stands at 3.66 million, slightly surpassing the 2019 employment level.

Meanwhile, Philippine Chamber of Commerce and Industry President George Barcelon underscored the importance of upskilling workers.

“Upskilling and reskilling of workers to promote competency is especially crucial as companies transition to digital operations and automations,” he said.

Barcelon urged businesses to embrace technology.

“Equipping young people with higher value skills specifically on digital literacy or being familiar with a variety of technologies, enhancing their problem-solving, communication, cognitive skills inculcating a sense of entrepreneurship will come in handy, especially for our country which is in a demographic sweet spot in a fast-rising region,” he said.