BRINGING down the cost of power should be on the agenda of the next administration to give the country a chance to stand toe-to-toe against our regional competitors in attracting investors in the manufacturing sector, said Rick Santos, newly installed president of the American Chamber of Commerce of the Philippines (AmCham).
Santos said that, while the Philippines is expected to sustain its growth momentum, even with the foreseeable cooling of China’s economy, it should be wary of its rivals; particularly Vietnam, whose exports growth bucked the slowdown in neighboring economies.
“I don’t see Vietnam as a direct competitor of the Philippines on the business-process outsourcing side but on the side of manufacturing,” Santos said in an interview on Tuesday.
“For the next administration, the high cost of power needs to be addressed, as our rates remain one of the highest in Southeast Asia,” he added.
This is key for the Philippines to benefit from the slowdown of the world’s second-biggest economy, effectively sending a good signal to manufacturing firms looking for alternative sites of production, Santos said.
Ramping up the manufacturing sector has been the cornerstone of the Department of Trade and Industry’s (DTI) industry-development thrust.
The DTI recently boosted its budget for its Manufacturing Resurgence Program to P289 billion for 2016.
The need to get an edge over Vietnam is underlined further by the fact that the East Asian nation is included in the Trans-Pacific Partnership (TPP) agreement, and has been aggressive in concluding free-trade agreements with countries that are also the Philippines’s top trading partners.
Economists said Vietnam’s inclusion in the TPP serves as a catalyst to attract more foreign investments to Vietnam, especially in garments and textile manufacturing.
Vietnam’s 10.3-percent growth in manufacturing in the fourth quarter of 2015 dwarfs the 1.0-percent growth in the Philippines’s value of production index recorded last November.
Santos said the other initiatives that the next administration should tackle include quicker infrastructure rollout, reforms in the judicial branch and transparency in governance.
Image credits: Roy Domingo