Diversification, implementing targeted, granular strategies to boost exports

The government aims to significantly diversify exports and implement targeted and granular strategies to increase exports on various fronts in line with making the trade sector one of the strong and positive contributors to overall national growth over the medium term.

“Multiple priorities signal no priorities; thus, strategies will be further sharpened to make them credible for local and foreign investors,” said Philippine Development Plan (PDP) 2023-2028.

Under the PDP 2023-2028, given the tight fiscal space for the provision of incentives and subsidies, the government targets to draw the most specific information possible to identify concrete entry points for local firms in global value chains (GVCs) –industrial, manufacturing, and transportation; technology, media, and telecommunications; and health and life sciences.

This entails the scanning of opportunities benchmarked on an in-depth and honest analysis of the country’s current skills set and not only on the GVC’s technological profile, it said.

The new PDP said that due to the utmost goal of generating jobs, especially for unskilled workers, renewed focus and targeted support programs will be implemented for agri-marine-based and labor intensive manufacturing, such as processed food and garments.

“Problem-oriented coordination mechanisms, especially in the rural areas to address context-specific bottlenecks, will be actively utilized as an approach to resolve these constraints as well as address general problems of inadequate access to financing and insufficient provision of agricultural extension to transform antiquated production practices,” it said.

Under the Plan, the government also aims to diversify exports by fortifying the sectoral backward and forward linkages.

“The shrinking export product space will be transformed by identifying and supporting local firms that have trigger roles in linking upstream and downstream sectors in the economy. The agri-processing sector, for instance, is populated by these types of firms,” it said.

The PDP said servicification of manufacturing and agriculture will entail the expansion of government agencies assistance and work toward implementing these in the regions, such as Department of Trade and Industry’s shared services facilities to include common business services, especially for micro, small and medium enterprises (MSMEs) and cooperatives with potential export transitions.

“Value chain interventions will go beyond mere provision of physical inputs but focus on organizational development, and brokering multi-sectoral partnerships to capacitate smallholders and make value chains inclusive,” it said.

The Plan further said concrete indicators will be developed to gauge the ability of local suppliers to replace a significant share of inputs imported by GVC subsidiaries.

This requires firm and sector analysis based on the least cost disadvantage relative to benchmark estimates of foreign competitor positions; and close collaboration with the private sector, particularly with professional specialists’ groups, it added.

The PDP identified other strategies to strengthen global position of Philippine export sectors, including resolving key constraints to export growth and competitiveness; proactively monitoring and implementing preventive measures and interventions for distressed firms; advancing purposive, assertive, and forward-looking free trade agreement strategies; ensuring integrated, whole-of-government commitment to deliver broad access to the National Quality
Infrastructure; and positioning the Philippines as the foremost supplier of tradeable intermediate services.

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