ASEAN INTEGRATION:

THE NEXT DECADE

AHEAD

Presentation by Prof. Federico M. Macaranas, PhD

39th Annual Conference of the

Integrated Electrical Engineers of the Philippines

SMX Convention, Mall of Asia, Pasay City

29 November 2014

Key Messages 1. The ASEAN Community widens the opportunities for

Engineers. ASEAN recognizes the significance of

engineers for regional economic dynamism.

2. The global war for talent is diffusing local engineers and

could stifle innovation in the domestic front. There is a

need to keep them abreast with these issues and invest

energies turning these challenges to economic

opportunities.

3. Education and leadership trainings remain vital for

shaping a ready workforce for an ever competitive

landscape. Reengineer education that is relevant and

globally benchmarked.

WHERE ARE WE

HEADING? ASEAN ECONOMIC COMMUNITY PRESENTS

VIBRANT OPPORTUNITIES

ASEAN ECONOMIC COMMUNITY

STRATEGIC SCHEDULE OF THE AEC BLUEPRINT (2008-2015)

Pillar 1 Single Market & Production

Base

• Free flow of goods • Free flow of services • Free flow of

investment • Freer flow of capital • Free flow of skilled

labor • Priority Integration

Sectors • Food, agriculture and

forestry

Pillar 2 Competitive

Economic Region

• Competition policy • Consumer

protection • Intellectual

property rights • Infrastructure

development • Taxation • E-Commerce

Pillar 3 Equitable Economic

Development

• SME development

• Initiative for ASEAN Integration

Pillar 4 Integration

into the Global Economy

• Coherent approach towards external economic relations

• Enhanced participation in global supply networks

HUMAN RESOURCE DEVELOPMENT RESEARCH AND DEVELOPMENT

Opportunities for ASEAN Engineers

• AEC could contribute 3.1 million more jobs in the

Philippines. Demand for high-skilled employment could

also increase by 60% (2014 ILO-ADB joint study).

• Mutual Recognition Arrangement (MRA) on

Engineering Services represents the first MRA on

professional services by ASEAN.

• It complements other ASEAN initiatives such as the

ASEAN Sectoral Mutual Recognition Arrangement

for Electrical and Electronic Equipment.

• FTAs also provide vibrant opportunities for engineers

Source: Ong Keng Yong, Branding of ASEAN Professional Engineering Services and Education for Global Mobility, Speech at the ASEAN Federation of Engineering

Organizations, 30 November 2006

Branding of ASEAN Engineers

• ASEAN Engineers must be branded by

innovation, quality and cost-effectiveness.

• ASEAN encourages engineering

universities and colleges to advance the

quality of education.

• Training and skills of ASEAN engineers

are critical. Standards must be constantly

upgraded and harmonized. Source: Ong Keng Yong, Branding of ASEAN Professional Engineering Services and Education for Global Mobility, Speech at the ASEAN Federation of Engineering

Organizations, 30 November 2006

WHERE ARE WE? STATE OF ENGINEERING IN THE PHILIPPINES

Steady Supply of Fresh Engineers Graduates of Engineering and Technology programs had remained steady at about 49,000 a

year. However, share of Engineering graduates to the total graduates have been decreasing.

Philippine Engineering and Technology

Graduates by Year Engineering Graduates as Percent of total

annual graduates of all academic programs

48,951 49,617 48,464 48,448 49,705 52,152

53,621 55,554

57,369 59,108

60,936

9.50%

10.00%

10.50%

11.00%

11.50%

12.00%

Source: Commission on Higher Education (CHED)

Do we have Surplus/Shortage in some fields?

Aeronautical Engineer

1%

Agricultural Engineer 3%

Chemical Engineer 3%

Chief Marine Engineer Officer

0%

Civil Engineer 42%

Electronics Engineer 34%

Geodetic Engineer 2%

Mechanical Engineer 1%

Metallurgical Engineer

0%

Mining Engineer 1%

Registered Electrical Engineer

13%

Sanitary Engineer 1%

Results of 2013 Licensure Examination in Engineering Programs

Source of basic data: www.prc.gov.ph

Priority areas of

PDP 2011-2016:

1. Mining

2. Agriculture

3. Logistics

4. Shipbuilding

5. Housing

6. Electronics

7. Infrastructure

Priority industries

of ASEAN: 1. Agro-based

2. Air travel

3. Automotives

4. E-ASEAN

5. Electronics

6. Energy

7. Services

8. Tourism Among others

Professional Engineers are slightly increasing...

1,410

2,144 2,315 2,287 2,764

3,024 2,020

2,355 2,442

2,545

32%

51% 50% 48%

52%

0%

10%

20%

30%

40%

50%

60%

-

1,000

2,000

3,000

4,000

5,000

6,000

Year (2010-2014)

Electrical Engineering Board Exam Results

Fail

Pass

Passing Rate

Source: Professional Regulation Commission. Retrieved from www.prc.gov.ph

...But Brain Drain might potentially ensue In 2010, there are 12,685 newly licensed Filipino Engineers. In the same year, more than 16,000

Filipino engineers left the country for overseas employment

OFW Deployment by Occupation and Sex – New hires, 2010

Occupation Total

Project Manager (Construction) 102

Chemical Engineers 38

Civil Engineers 1,731

Electrical and Electronics Engineers 1,290

Industrial Engineers 384

Mechanical Engineers 1,072

Mining/Mineral Mining Engineers 4

Ship Engineers 7

Engineers ( N E C ) 1,937

Electrical & Electronics Engineering Technicians 3,486

Mechanical Engineering Technicians 3,175

Engineering Technicians (NEC) 2,858

Total Engineers 16,084

It should be noted

that on the same

year, the number

(1,410) of newly

licensed Electrical

Engineers almost

equal (91.5%) the

number of

Electrical and

Electronics

Engineer who

have left for

abroad.

Source: www.poea.gov.ph

If this trend persists, the country’s

capacity for innovation could be stifled There is a correlation between availability of S&E and capacity for innovation in ASEAN and its dialogue partners.

R² = 0.6716

0 1 2 3 4 5 6

Cap

ac

ity f

or

Inn

ovati

on

Availability of Scientists and Engineers

Scientists and Engineers for Innovation

Most of them are going to Middle East

Countries OFW Electronics and Electrical Engineer

Deployment, New Hires, 2010

Country Number

Saudi Arabia 835

Qatar 179

United Arab Emirates 62

Libya 32

Indonesia 31

South Korea 22

Algeria 16

Kuwait 15

Madagascar 13

United States 11

Others 74

Total 1,290

65%

14%

5%

2%

2% 2%

1% 1%

1% 1%

6%

Destination Countries

Saudi Arabia

Qatar

United Arab Emirates

Libya

Indonesia

South Korea

Algeria

Kuwait

Madagascar

United States

Others

These top destination countries have

high capacities to attract talent

0

1

2

3

4

5

6

7

Capacity to attract talent Does your country attract talented people from abroad? [1=not at all;

7=attracts the best and brightest from around the world]

Source: WEF Global Competitiveness Report 2013-2014

TWO MAJOR IMPLICATIONS FOR

COMPETITIVENESS

A. Promote Engineering Talents for the World:

Focus on capacity building and quality assurance

of engineering programs; ensuring that its

engineers comply with the international

standards.

B. Keeping Engineering Talents:

Employ them for its own development agendas

and pursue different strategies beyond technically

qualifying engineers.

Promoting Talents for the World Technically qualifying engineers means preparing engineers not only for overseas

employment but also for domestic employment that is internationally benchmarked.

International Agreements on Engineering Education

• Bologna Declaration

• Western Hemisphere Partnership

• Sydney Accord

• Dublin Accord

• Washington Accord

Washington Accord is poised to

create the most significant impact However, only 7% of Filipino Engineers were employed in Washington Accord economies

2%

7%

84%

4%

2% 0.5%

Filipino Engineers Deployed Overseas by Region, 2010 (New Hires)

ASEAN

Washington Accord Countries

Middle East (Saudi Arabia, UAE, etc.)

Africa

Others (South America, South Asia, Russia, Pacific Islands, etc.) Other East Asian Economies (China, Mongolia, etc.)

Engineers cannot solely rely on Middle East Middle East is expected to experience a decline in employment growth. Middle East engineering companies are

beginning to hire engineers from Washington Accord countries as well.

Improving Engineering Education Programs A 2006 Competitiveness Study on Education Services of the Philippines highlighted the significance of

Continuous Quality Improvement (CQI) and Technology Forecasting

0

1

2

3

4

5

6

7

Quality of Math and Science Education How would you assess the quality of math and science education in schools

[1=extremely poor; 7=excellent]

Source: WEF Global Competitiveness Report 2013-2014

Keeping Engineering Talents at Home

0

1

2

3

4

5

6

7

Capacity to retain talent Does your country retain talented people? [1=the best and the brightest leave to pursue opportunities in other countries; 7=the best and brightest stay and

pursue opportunities in the country]

Source: WEF Global Competitiveness Report 2013-2014

Keeping Engineering Talents at Home War for Engineering Talent is being defined by competitive compensations.

153240

115530 110558 98995 98445 96142 92971 88562

59628 57267 56692 55743 53313 47349 42397

35940

Remuneration of Engineers (US$), 2013

Source: IMD World Competitiveness Yearbook 2014

Making Engineering Relevant to Development The country’s emphasis on development entails consistent innovation and innovators.

5.6 5.6 4.9 4.8 4.6 4.5 4.5 4.4 4.3 4.2 4 3.8 3.8 3.5 3.5 3.5 3.4 3.4

2.7

Capacity for Innovation To what extent do companies have the capacity to innovate?

[1=not at all; 7=to a great extent]

Source: WEF Global Competitiveness Report 2013-2014

Making Engineering Relevant to Development Countries where Filipino engineers mostly go to for employment have the extensive and efficient

infrastructure (transport, telephony, and energy). The brain circulation phenomenon poses opportunities

for technology and knowledge transfer (i.e. TOKTEN).

0

1

2

3

4

5

6

7

8

Quality of overall infrastructure How would you assess general infrastructure (e.g., transport, telephony, and energy) in your

country? [1=extremely underdeveloped; 7=extensive and efficient]

Source: WEF Global Competitiveness Report 2013-2014

Making Engineering Relevant to Development The Filipino engineering community must be reformed and reengineered in response to the competitiveness and

energy efficiency issues confronting the domestic front.

0

1

2

3

4

5

6

7

Quality of electricity supply How would you assess the reliability of the electrical supply (lack of interruptions and lack of

voltage fluctuations)? [1=not reliable at all; 7=extremely reliable]

Source: WEF Global Competitiveness Report 2013-2014

Relevant Energy Security Issues

Domestic

• Power Supply Shortage

in Luzon of 300 – 500

Megawatts

• Short-term Solution:

Interruptible Load

Program

• Long-term Solution:

Additional Generating

Capacity

Regional • As countries turn into rapidly

growing economies, there is

projected higher demand for

energy.

• ASEAN Cooperation in

Energy:

– ASEAN Power Grid

– APSA (ASEAN Petroleum

Security Agreement)

– TAGP (Trans ASEAN Gas

Pipeline)

ASEAN’s Energy demand has risen two-and-a-half times since 1990. It is now equivalent to around 75% of the

energy demand of India (IEA & ERIA).

Energy Landscape in ASEAN

Source: International Energy Agency & Economic Research Institute for ASEAN and East Asia

CONCLUSION • ASEAN integration offers opportunities not only for new

jobs but also for pressures to improve the engineering

profession.

• The global war of talent is becoming worrisome. A

vibrant Philippine economy should generate suitable

jobs for Filipino talents to remain in the country.

• Education plays a vital role in shaping the best

engineers of the country. This must be complemented

by leadership training programs that will keep them

abreast of the development issues.