View
215
Download
2
Category
Preview:
Citation preview
Japan’s Inputs towards the Formulation of
Industry Vision of the Philippines
Industrial Development Scenario for “No One
Left Poor”
29 November, 2017
Kunihiko ShinodaDeputy Director-General
Ministry of Economy, Trade and Industry, Japan
1
“Philippine ambition: No more poor Filipinos by 2040,” “Philippine
Development, Plan (PDP) 2017–2022,” mentions "To become a middle-
income country with poverty alleviated completely" as a goal until 2040.
“Philippine ambition” has started promoting reform for enhancing the
social structure and correcting unfair inequality as well as enhancement
of economic growth potential in order to achieve the goals such as:
establishing a clean and “Filipino first” government;
realizing a society where even socially-handicapped and alienated people can
actually feel the economic growth,
and ensuring economic safety and stability by increasing the national welfare.
Background
2
Global competition is becoming severer, especially after the full enforcement of AFTA in 2018.
There are export pressures from China and India, while ASEAN member states
have to identify their comparative advantages.
Make in India=
Promotion of manufacturing
and export
Influx of over
produced goods
Full enforcement of AFTA in 2018
Competition among Asian countries
3
One of the advantages of the Philippines is a growing domestic market andpopulation.
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Indonesia Malaysia The PhilippinesThailand Viet Nam
Indonesia
Viet Nam
The Philippines
Malaysia
Thailand
Source: IMF World Economic Outlook Source: UN Population Division、2015 estimation
GDP growth rates and estimates for
major ASEAN countries Population dividend for major Asian countries
4
The Philippines is ranked number 8 of potential business destination of Japanese manufacturing companies.
Source: JBIC questionnaire survey data
77%
32%
23%
21%
19%
0% 20% 40% 60% 80%100%
Growth potential of the
local market
Inexpensive labor
The size of the market as
of today
Supply base to assemblers
Export base to other
countries
Source: JBIC questionnaire survey data
Ranking of prospective investment destination
by Japanese manufacturing companies
Reasons of prospectivity of the Philippines as
investment destination
5
the Philippines has faced some challenging issues for creating the above-
mentioned employment.
Survival among countries due to ASEAN economic integration
Insufficient domestic industry accumulation, outflow of highly skilled HR
Oligopoly of industry, unfair business circumstances, governmental capacity
This vision indicates a scenario of creating stable employment for “No
One Left Poor” and the policy direction, and introduces successful cases
in other countries, including Japan.
Role of Industrial Development Vision
6
Scenario for Realization:Pillar1Pillar1 Creation of Large-scale Employment - Establishment of Domestic
Industrial Base -
<Step 1> Introduction
• Necessity of competitiveness in both quality and cost for domestic production
increase
• Lack of capital, technology, human resources, know-how
• Introduction of foreign capital / technology → Necessity of activating domestic
demand
<Step 2> Spillover to local industry
• Invitation of foreign SMEs, supporting industries → Spill over of technology and
management know-how to local companies → competitive local SMEs
<Step 3> Participation in global value chain
• Improvement of industrial infrastructure and creation of large-scale employment
→ Strengthening industrial competitiveness. Forming foundation of export
industry
7
Direction of Policy & Proposal for Pillar1
Identification of Industry Groups to
be Focused on and Strategy
Formulation
Expansion of Support for Local
Supporting SMEs
Ensuring Fair Competition
Developing Supporting Industries
and Industries for Domestic Demand
through Attracting Foreign Capital
Development of Infrastructure and Cross-Agency
Industrial Development System
Introducin
g foreign
capital for
domestic
demand
Formulation of industrialization strategy by
public-private partnership
Creating Domestic PEZA
Political leadership remediation campaign
Attracting foreign Supporting Industries
Industry-Oriented Human Resource Development
Developing supporting industry by
benchmarking CARS program
Expanding financing for SMEs
Interagency coordination
through IDC
Consolidation / transition support of existing
industries
Deregulation of foreign investment in retail
Expanding retail financing
Expansion of vocational training schools
Introduction of Framework for
Promoting Domestic Trade
Further Activation of Domestic
Demand
Direction of Policy Proposal
8
Importance of supporting industry and attraction of foreign investments by
companies with technology and cutting-edge processing equipment.
For Example…
44
618
228
0
100
200
300
400
500
600
700
The Philippines Thailand Indonesia
Number of member companies of auto-parts industry associations
Source: NRI based on hearing
from each association
Support for local business development in human resource development and
capital investment.
Incentive scheme and improvement of ease of doing business for promoting
investments aiming the domestic market.
9
Scenario for Realization:Pillar2
Pillar2 Creation of High Value-Added Employment -Retaining Highly Skilled
Industrial Workers within the Philippines-
• Leak out of human resources with advanced knowledge, skills, ability to
overseas
• Creating high value-added / advanced industrial groups to secure HR, in
addition to utilizing HR in foreign companies
<possible perspective>• Utilization of industries already having strengths (IT industry etc.) → High value
added by expanding business (design, etc.) and cooperating with other
industries
• Creation of new industries → Promotion of entrepreneurship such as start-up,
Promotion of cross-sectoral integration projects, innovation, university
incubation base, etc.
10
Direction of Policy & Proposal for Pillar2
Business Expansion of
Existing Industry and
Cooperation with Other
Industries
Integration of IT and electronics
industry by Embedded IT
Promotion of collaborating project
Promoting start-up companies
Promoting FinTech
Creation of high
added
value/advanced
industrial group
Creating New Industries
and Promotion of
Entrepreneurship for
Innovation
Promotion of Projects for
Creation of New
Industries and Innovation
Making university incubation base
Formation of industry, government
and academe consortium
Attracting highly skilled industrial
human resources to return to the
country
Direction of Policy Proposal
11
Full utilization of Filipino who are capable of English and IT.
ASEAN regional engineer hub
ASEAN regional ESO hub
Promotion of innovation to increase start-ups and enhance hybrid sectors of IT
and other sub-sectors.
For Example…
Start-ups at ASEAN-JAPAN Fair in Manila Ministers at ASEAN-JAPAN Fair
12
Scenario for Realization:Pillar3
Pillar3 Creation of Employment through Local Industry Development –
Agriculture, IT/BPO industry, etc.-
• Focusing on specific industries by taking advantage of the characteristics of
rural areas (Central Luzon, Calabarzon, Mindanao),
→ Providing incentives to enterprises in rural areas
<Potential Target area>• Promoting agriculture, forestry and fishery industries using attractive products
/ upgrading logistics system
• Promoting IT / BPO industry that can overcome geographical division
• Ripple effect for tourism and retail
13
Direction of Policy & Proposal for Pillar3
Increasing Added Value
by Clustering and
Modernizing of Agriculture
Development of IT-BPO industry
Incentives for Company Location in
Regional Areas
Supporting Local Governments to Make
Industrial Policies
Improving fishing ports / seaports
Presentation of regional incentives
Upgrading Logistics
Enabling Freshness
Maintenance
Support for expanding business into food
processing industry
Formulation of support for local
governments
Improving cold chain
Regional brand certification system
Attract IT-BPO industry to provincial areas
Promotion of
agriculture
Creating derivative effects on tourism / retail
Direction of Policy Proposal
14
Food value chain: Value chain linkage is weak between mega consumer market
such as Manila NCR and other agricultural areas.
Bridging agriculture and food processing sectors and establishing distribution channel
and cold chain network.
Vitalization of service industry including retails that will be stimulated by the
development of above mentioned sectors and tourism.
IT/BPM can conquer the geographical disruption, create a large employment and
utilize the English ability of the Filipino.
For Example…
15
For Example…
Bacolod
Manila
Cagayan De Oro
Cebu
Davao
Dumaguete
Iloilo
Laoag
Legazpi
Naga
Puerto Princesa
Roxas
Tuguegarao
Zamboanga
Source: NRI, based on National ICT Confederation of the Philippines
Clark
BaguioDagupan
Dasmarinas
Lipa
MalolosSta Rosa
Taytay
Balanga Iriga
Tarlac
Centres of Excellence
Top Ten Next Wave Cities
Emerging Cities
IT/BPM is widely spread throughout the
country. Four out of six centers of excellence
are located in Mindanao and Visayas.
Next Wave Cities of IT/BPM
16
Thrusts of infrastructure development.
Policy coordination among governmental agencies towards effective
implementation.
For Example…
17
Japan will cooperate for Philippines industrial development and Philippines
industrial policy
For example・・・
For the foundation of Large-scale Employment, assisting for promoting local
supporting industries, and assisting Industry human resource development
For creation of High Value-Added industry, cooperating for start-ups and
funding pilot project for innovative business
Provision of information for policy making and support for capacity building
utilizing various dialogues.
Japan will cooperate for realization of Philippines industrial vision
Recommended