Up to P30 billion will be needed in the next three years to revitalize the country’s manufacturing sector, the Dept. of Trade and Industry yesterday said.
Ramon Lopez, DTI Secretary, in a summit of the country’s top manufacturing firms said the allocation will be used to upgrade industrial processes through new business models and soft loans, grants vouchers, reduced trade barriers and enforce products standards.
Proposed projects will prepare firms, industries and workers for the future of work, while support funds will be made available to facilitate transformation of firms to new technologies, Lopez said.
The idea is that good industrial policy is behind the success of manufacturing in Southeast Asia.
“Successful industrial policy in Thailand and Malaysia resulted in manufacturing reaching over 30 percent share of their GDP (gross domestic product),” Lopez said.
Thailand’s Industrial Restructuring Program, crafted in 1997, generated $1.19 billion in soft loans, technical assistance to 13 industries—food, textile, garments, pharma, chemical, rubber, plastic, auto, electronics, iron and steel and petrochemicals.
Malaysia’s 7th Plan from 1995 to 2000 saw a new industrial policy moving the country to high-tech manufacturing in integrated steel mill, wafer fabrication, aerospace and petrochemical.
The Philippines enacted its Innovation Act only this year with a budget of P1 billion or roughly $20 million.
In contrast, Thailand’s Competitive Fund is worth about $331 million.
Malaysia invests a total of $1.25 billion. That includes the Industry 4RWD Transition Fund worth $50.6 million, Innovation Loan Fund worth $481 million and the Industrial Digitalization Transformation worth $722 million.
Indonesia’s 2020 Industry 4.0 Funds from the National Budget aims to improve manufacturing competitiveness. It is worth $178 million.
Vietnam’s National Technological Innovation Fund and Science and Technology Development Fund are worth $45 million. It reduced by half the commercial interest rates for loans related to innovation.
Lopez said industrial plans and strategies are in place in the Philippines “but no program fund support.”
Funding will support the simplification of the manufacturing processes and automation; power, logistics and infrastructure; the use and adoption of new technologies; the promotion of research commercialization; and the creation of new products, services and business models.
Lopez said the Philippines is on the right track to upskill and reskill its workforce, integrate production systems, and encourage innovative small and medium enterprises and startups.
It is upgrading the education curricula and the digital skills training programs. The country is also trying to link manufacturing with the agriculture and services sectors and participate in global value chains.
Among many others, the DTI priorities cover the electrical and electronics industries; auto and auto parts; aerospace parts; chemicals; shipbuilding; innovation research and development; creative industries; integrated circuit design; advanced products and technologies; the Internet of Things; robotics, drones; cognitive cloud; and 3D Printing.
It also includes telematics; autonomous vehicle sensors; virtual reality systems; onboard computers; aerospace electronics; and electronic jeepneys, buses, trikes and motorcycles.