Priority industry clusters bare wish list for competitiveness, digital transformation

Four priority industry clusters have aired the major issues that hinder their growth and competitiveness, many of these concerns cutting across several sectors, and unveiled their recommendations to overcome them, including greater support to local manufacturers, particularly micro, small and medium enterprises (MSMEs).

These priority clusters—Industrial, Manufacturing, and Transport (IMT); Technology, Media, and Telecommunications (TMT); Health and Life Sciences (HLS); and Modern Basic Needs and Resilient Economy (MBNRE)—raised their concerns and suggestions at the recent Industrial Digital Transformation Congress, organized December 6 by the Department of Trade and Industry-Competitiveness and Innovation Group (DTI-CIG).

The industry consultation reports of the priority industry groups were the result of a series of consultations conducted by the DTI-CIG as the agency drafts a strategic plan for the country’s industrialization and digital transformation over the next six years.

The public consultations were held between September and October this year, with the inputs and insights to be used to guide the DTI’s priority industry strategy from 2022 to 2028. The DTI said it is striving to mainstream digital transformation in the government’s industrial policy and increase collaboration efforts to intensify the adoption of new technologies and promote innovative and resilient industries.

Based on these industry consultations, the government has its work cut out for it, as the clusters submitted long lists of old and new grievances as well as suggestions for sustainable development.

Notably, many of the problems raised are shared across the different clusters and have burdened many industries for a long time. These include the scarcity and high cost of raw materials, complicated and restrictive policy requirements, burdensome customs and tax processes, poor road conditions and industrial infrastructure, and limited access to global markets.

The various groupings also deplored the limited support and funding for local manufacturing, lack of domestic preference in government procurement, heavy dependence on imported basic commodities, and MSME hardships in complying with labor and environmental laws.

On the other hand, more recent pressing issues mentioned include finding a niche market for electronic vehicles (EVs), difficulty in transitioning to e-commerce, lack of digital/ICT infrastructure, lack of support for non-blockchain sectors, difficulty adjusting to the Corporate Recovery and Tax Incentives for Enterprises or CREATE Act, and non-integration of climate resilience into strategic plans.

IMT cluster

To address these issues, the industrial, manufacturing, and transport group—represented by Roberto Batungbacal, country director of Dow Chemical Philippines—recommended formulation of the Philippine Skills Framework, approval of zero tariff for imported EVs for a few years, increased responsiveness to the changing supply chain landscape, and for the footwear sector, building of a manufacturing base for school, military and safety shoes.

Batungbacal added that the IMT cluster is also seeking the strengthening of the local supply chain, support for the growth of the agri-manufacturing sector, and the review and benchmarking of Vietnam’s policies and programs that have helped it attract big investors.

The IMT stakeholders likewise urged a review of the CREATE Law and the Strategic Investment Priority Plan (SIPP) to identify provisions that are hard to comply with.

TMT cluster

For the technology, media, and telecommunications cluster, presenter Alvin Culaba, an academician at the National Academy of Science and Technology and the De La Salle University, recommended the promotion of original intellectual property to foreign firms, offering of fiscal incentives such as rebates to entrepreneurs, and consolidation of government initiatives to avoid duplication.

Moreover, the TMT cluster pushed for programs that will support digital privacy, cyber security and data privacy. It also proposed the institutionalizing of work-from-home incentives for the IT-BPM workforce, and providing of work experience to students or trainees as part of upskilling initiatives.

HLS cluster

On behalf of the health and life sciences cluster, Unilab’s Jose Maria Ochave said the group’s suggestions include creating green lanes for local manufacturers and giving preference to locally manufactured products, adopting the ASEAN Harmonized Tariff Nomenclature, providing easy access to R&D incentives, and organizing webinars on food product registration in countries with strict regulatory authorities.

Likewise recommended are the promotion of medical travel and wellness tourism and an increase in industry competitiveness to enable the country to be a center of excellence for medical care.

Also part of the HLS wish list are the conduct of natural products and other health-related trade exhibits, more research on specific herbs with export potential, expansion of exports of herbal-based products in various formats, and development and strengthening of an integrated ecosystem with strong links to local farmers for sourcing of local materials.

The pharmaceutical industry of this cluster also batted for the implementation of the integrated pharmaceutical roadmap and a review of the mandatory price reduction policy, while it also sought help in finding ways to access lower-priced active pharmaceutical ingredients.

MBNRE cluster

The cluster for modern basic needs and resilient economy (MBNRE), on the other hand, is pushing for more grants to industries that support technology development, simplifying of the doing-of-business process through creating a one-stop shop, a 10% or higher share of government procurement to MSME products, and the linking of agricultural strategy with industrial strategy for a clearer food security roadmap.

Also recommended by the MBNRE cluster, whose report was presented by director Janet Cuenca of the DTI’s Bureau of Trade and Industrial Policy Research, is the review of Republic Act No. 8172 or ASIN Law to make the local salt industry more competitive in the global market.

Cuenca also stressed the need to harmonize government policies at both national and local levels in the regulation of single-use plastics and effluents for freshwater, among others.

In her talk, the DTI official acknowledged that some of the issues are not new but assured that these continue to be addressed by various government agencies through applicable laws and programs.

“However, we recognize that there is much work to be done in order to address the perennial issues,” she said. “Our pursuit remains—build up competitive and innovative industries and strengthen linkages in regional production networks and global value chains.”

To achieve this, she said collaboration efforts between the government, industries, and academe will be paramount, and digital transformation and the adoption of new technologies will take more prominent roles in the near future.

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