Over the years, our government has taken steps to address the structural challenges of the economy—be it the high cost of power, inadequate skills of our workforce, or poor logistics. What has been lacking is a coordinated transformation of the economy across three specific, albeit interrelated dimensions. First is the imperative to modernize agriculture and increase its productivity. Second is the need to increase the employment share of the manufacturing sector, and in general, of the complex sectors of the economy. And third, the production and export of a more complex basket of products and services, such as but not limited to the making of advanced microchips, electric vehicle components, and even aerospace parts.
According to the Atlas of Economic Complexity of Dr. Ricardo Hausmann of Harvard University and Dr. Cesar Hidalgo of the Massachusetts Institute of Technology, a country becomes prosperous when it is able to produce and trade a diverse array of complex and uncommon products and services. To achieve this diversity, it needs to leverage the relatedness of the skills, productive know-how, inputs, and technology it possesses, to make new products and services and further expand its capabilities. A country empowers itself to branch out into other forms of complex production and economic activity by aiming to be competent in producing and offering sophisticated products and services, thereby launching a virtuous cycle where high-paying “good” jobs are generated.
Indeed, economic development should be pursued collectively as neither the public nor the private sector can achieve this by themselves. Hastening the process of transforming the Philippine economy demands that stakeholders from both the public and private sectors organize, plan, align, and integrate their respective efforts. Comparing our policies with countries that are more prosperous, it is clear that their efforts are more in sync and as a result they have been able to produce more advanced goods and services.
Inspired by the consultations our office has conducted over several years with various stakeholders, we recently filed Senate Bill No. 2218 or the Tatak Pinoy (Proudly Filipino) Act, which aims to institutionalize a programmatic and multisectoral approach to the country’s development planning and public expenditure policies, ensuring that throughout the process, local enterprises are prioritized and provided ample support.
Specifically, the measure seeks to mandate government agencies to collaborate with the private sector, including the academe and civil society, to formulate, finance, implement, monitor and evaluate a comprehensive strategy—involving plans, programs, projects, and policies—focused on the expansion and diversification of the productive capabilities of local enterprises.
On May 30, 2023, as Chairman of the Senate Committee on Finance, we held a public hearing to discuss the views of stakeholders on the bill. The measure drew unanimous support from all agencies and guests that attended with some even presenting recommendations on how to achieve the measure’s industrialization agenda.
For one, DTI Undersecretary Rafaelita Aldaba explained the Comprehensive National Industrial Strategy and Manufacturing Resurgence Program that starts with rebuilding existing capacities (i.e., auto) and strengthening emerging industries (i.e., aerospace parts) including maintaining competitiveness of comparative advantage industries such as electronics, garments, auto parts, food, and resource-based industries. This would then be followed with a shift to high value-added activities and investment in upstream industries (i.e., chemicals, iron & steel), moving up the value chain and linking and integrating industries and small and medium enterprises. The final phase of this Roadmap would entail moving to high tech transport equipment, chemicals, electrical machinery, manufacturing related services and participating as manufacturing hubs in regional and global production networks for auto, electronics, machinery, garments, and food.
Dr. Ronald Mendoza, IDinsight’s Southeast Asia Regional Director, said that the proposed measure aptly sets up a transparent, science and evidence-based process in formulating policies that is crucial to drive industrialization. Mendoza added that top-down approaches done in the past will not be effective anymore, and that the private sector must be involved in crafting these roadmaps.
Dr. Chris Monterola of the Asian Institute of Management stated the need to push specific products up the value chain, as well as an increased focus on research and development through education.
With the country being expected to achieve upper middle-income status in the coming years—driven by an increasing population and a productive industrial sector, now is the opportune time to pursue these goals. We dubbed this advocacy Tatak Pinoy because we believe that the results it seeks to achieve—namely, world-beating Filipino enterprises selling globally competitive Philippine-made products, goods, and services to the rest of the world—are things that the country as a whole can and should be proud of.
Senator Sonny Angara has been in public service for 18 years—9 years as Representative of the Lone District of Aurora, and 9 as Senator. He has authored, co-authored, and sponsored more than 330 laws. He is currently serving his second term in the Senate.
E-mail: email@example.com| Facebook, Twitter & Instagram: @sonnyangara