The Philippines can capture bigger share in the global value chains (GVCs) of the electronics and business process outsourcing (BPO) sectors.
The World Bank report titled, A New Dawn for GVC Participation in the Philippines, said the opportunities presented in the electronics and electrical parts and components GVCs can attract foreign investments in design capacity so that more value added is captured and manufacturing is retained and expanded in the country.
There are also bigger opportunities for BPO companies to move up the ladder by providing value added services like analytics.
According to the report, the country needs to overcome some “structural constraints” to take advantage of ongoing trends in GVCs.
These constraints include restrictions on foreign direct investments (FDI) in various sectors of the economy and scarcity of advanced science, technology, engineering, mathematical skills, among others.
To attract FDIs, the Philippines passed amendments to the Foreign Investments Act, Retail Trade Liberalization Act and the Public Service Act, among other reforms.
“Timely implementation of these legislations is essential for the Philippines to attract investors looking for alternative production sites as transnational companies adjust to the challenges posed by pandemic,” said Souleymane Coulibaly, lead economist and program leader for Equitable Growth, Finance and Institutions Practice Group for Brunei, Malaysia and the Philippines.
Given fiscal space constraints, the report said partnership with the private sector may be needed to raise the financing required to fill the country’s infrastructure gap, focusing on connectivity, digital as well as physical, and secure access to a competitive and clean energy supply.
To boost advanced skills in the Philippines, the government needs to accelerate its innovation strategy, according to the study. Angela Celis
