Industry leaders urged to improve competitiveness

IMPLEMENT immediate reforms to boost the Philippine manufacturing and exporting sectors to improve competitiveness level. This is the urgent appeal of industry leaders to policymakers as they pointed out how the country continues to bring up the rear in the competitiveness race with its neighbors in the Association of Southeast Asian Nations.

While Malaysia, Singapore, Thailand, and Vietnam manufacturers and exporters have benefitted greatly from the rise in globalization, the Philippines has yet to reach their level of success, said company leaders at a recent forum on Philippine global competitiveness.

They mainly blamed the harsh business environment in the country for the slow growth. “Domestic manufacturing has never faced more challenges to survival than today, such as high business costs, low import duties, and extensive technical smuggling,” says the Arangkada Philippines Second Anniversary Assessment, which evaluates the economic progress made by the country in 2012.

The assessment, released in the first quarter of this year, offers several recommendations to bolster manufacturing competitiveness.

Among these is to give greater priority to manufacturing and make serious efforts to offer a competitive business environment. Manufacturing does not rank high on the Philippine Development Plan’s list of priorities, the business leaders said, even as they called on government agencies to work with the private industry to implement a clear overall policy supportive of the segment.

They also suggested diversifying Philippine exports. “Without electronics, exports of manufactured goods would have grown very slowly, as garment exports have contracted [and] automotive manufacturing [is] undermined by used car imports and the higher cost of car assembly in the Philippines. The high percentage of exports made up of electronics is a failure to develop a diversified mix of manufactured exports, creating a risk should the viability of electronics manufacturing decline.”

As for the high cost of producing in the Philippines, the government is urged to consider removing or reducing the extended value-added tax on electricity and fuel for domestic manufacturers. “There was no serious advocacy or consideration by the private sector [or] government agencies in 2012 on removing or reducing EVAT on power and fuel for domestic manufacturers,” the industry players said.

And while they clamor for “less unwarranted government interference” in industry matters-except during calamitous situations where price control of basic commodities is critical-they sought more funding for the Department of Trade and Industry and its promotion of Philippine exports, inward foreign investment, and tourism.

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