Manufacturing remains crucial for recovery, transition to high-income status

Despite the current community quarantine restrictions in the country, the Department of Trade and Industry (DTI) successfully gathered once again key stakeholders from the public and private sectors during the annual Manufacturing Summit held on August 25 and 26 to discuss the state and prospects of the Philippine manufacturing industry.

The main remarks and presentations delivered across the two-day Summit focused on the significance of the manufacturing sector as a major growth driver of the Philippine economy, the need to continuously build and enhance manufacturing firms’ capabilities and workforce skills, and the tools and means by which enterprises can be enabled to move closer towards Industry 4.0.

On Day 1, Secretary Ramon Lopez highlighted in his keynote address that the manufacturing sector has been a key driver of the country’s economic growth in recent years and that, while it was severely impacted by the pandemic in 2020, it is now leading the economy’s recovery from a recession. While risks and uncertainties remain, he stressed that innovation and digitalization will play a crucial role in ensuring business continuity and competitiveness under the new normal and called on government and the private sector to continue their active collaboration towards the resilience of the country’s industries.

“We are certain that digital technologies will continue to play a crucial role in ensuring a swift reaction to the crisis, ensuring business continuity, accelerating recovery, and most importantly, protecting workers and their employment… Firms and enterprises must be agile to rapidly tailor production and supply systems and develop new capabilities to adapt to changes in consumer behavior… Amid changing production patterns, new technologies can be utilized to enhance supply chain visibility and reliability within domestic and global value chains… [The future of the manufacturing sector] will be a shared responsibility, and close collaboration between the government and the private sector to address social, economic, and environmental challenges will remain essential,” remarked Secretary Lopez.

In her remarks stressing the imperative for digital transformation, DTI Competitiveness and Innovation Group Undersecretary Rafaelita Aldaba said, “[o]ur I4.0 policies are geared towards the promotion of labor augmenting technologies, particularly the emergence of new tasks at which humans have a comparative advantage. New technologies like AI are not here to destroy jobs or replace humans, but to create new jobs and change what work looks like, augment human intelligence and skills and make our workplaces safer… The people are at the center of DTI’s 4IR transformation plans with a focus on inclusive growth and enabling people at every level of society to take part in building an innovative and creative future.”

During the session on “The Path to Recovery: Performance and Prospects for Philippine Manufacturing,” DOF Asec. Juvy Danofrata underscored the importance of the recently passed CREATE law as an economic recovery measure, especially during these trying times, by providing much-needed relief for MSMEs, ending investor uncertainty, and enabling the generation of more quality jobs in the country. For her part, BOI Executive Director Corieh Dichosa emphasized that the country’s strong macroeconomic foundations coupled with the government’s responsive programs would enable the nation’s firms and industries to deepen and strengthen their participation in global value chains. DOST Undersecretary Rowena Guevara discussed the various programs and support that the government is providing to enhance the capabilities of the manufacturing sector through science and technology and advocated for more government-industry-academe collaboration.

 

On Day 2 of the Summit, Socioeconomic Planning Secretary Karl Kendrick Chua emphasized in his keynote remarks that the country’s manufacturing industry will be essential to growing and sustaining the economy’s upper-middle income status and transition to high-income country status in the next two decades. He likewise reiterated the importance of pushing forward with the government’s tax reform program, passing key legislation (such as the amendments to the Public Service Act, Retail Trade Liberalization Act, and Foreign Investments Act), and implementing priority infrastructure projects.

In the session on “The Road to Resilience: Stimulating Industry 4.0 Transition in the Philippines,” WEF Smart Industry Readiness Index (SIRI) Program Lead Ben Ong presented how SIRI can be an effective tool in catalyzing the digital transformation of manufacturing companies by providing them with an objective, non-bias review of their production facilities that would assist them in their

digitalization priorities. McKinsey Partner Alpesh Patel stressed the urgency of retraining and skills upgrading for the manufacturing sector’s workforce in order for enterprises to become more productive and sustain their competitiveness in today’s economy. D&L Industries Director Chris Lao shared their experience with SIRI and echoed the value of assessing one’s Industry 4.0 readiness and prioritizing upskilling in its digitalization plans.

A highlight of the Summit was the induction of the DTI as a Partner of the WEF’s Global SIRI Initiative. Through the Initiative, DTI aims to accelerate the deployment and adoption of SIRI as a recognized standard for Industry 4.0 benchmarking and transformation in the country.

In his remarks, WEF Executive Committee Member and Head of Advanced Manufacturing and Production Platform Francisco Betti welcomed the DTI to the WEF’s Global SIRI Initiative saying, “we are extremely delighted to partner with DTI for the scale-up of this initiative for the Philippines manufacturing ecosystem. SIRI can truly help manufacturers start, scale, and sustain the Industry 4.0 transformation journey of their manufacturing facilities, whether small or large.”

 

Undersecretary Aldaba expressed her gratitude to WEF for the partnership, as she emphasized its importance in shaping DTI’s advanced manufacturing policies and initiatives that focus on competitiveness, sustainability, and inclusiveness.

The recording of the Manufacturing Summit 2021 can be viewed at the DTI Facebook page (https://www.facebook.com/DTI.Philippines/).