Press Releases Archived (December 2013)

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The Philippines needs to beef up manufacturing if it wants economic growth to be inclusive, according to the Philippine Institute for Development Studies (PIDS).

The countrys GDP growth hit 7.5 percent in the second quarter and was second to China due to the success of the services sector, particularly business process outsourcing, and the continuous flow of remittances from overseas workers. However, the manufacturing sector has been a laggard and must get a boost so that the Philippine economy doesnt have to rely much on the service sector and remittances, said PIDS President Gilberto Llanto during a recent knowledge-sharing forum on Industry Roadmaps and National Industrial Development at the House of Representatives in Quezon City.

The boom-bust cycle of the Philippine economy is in fact due to the sluggish growth of the manufacturing sector, said PIDS Senior Research Fellow and Acting Vice-President Rafaelita Aldaba. As a result, economic growth has been unable to make a significant dent on poverty and unemployment.

If you want economic growth be inclusive, we should not rely on the services sector alone, Aldaba said in the forum organized by PIDS and the Congressional Policy and Budget Research Department (CPBRD). We can create more quality jobs in the manufacturing sector, she added.

There has been a very little movement of resources in manufacturing, where the share of value added to GDP declined to 23.7 percent in the 2000s from 26.3 percent in 1980s, she noted. In contrast, Thailand, Indonesia, and Malaysia saw higher value added since the 1990s.

The desired structural changes to create enough employment also did not take place in the manufacturing sector, Aldaba said. Employment average share of manufacturing dropped from 10 percent in 1990s to 9.1 percent in 2000s, which reflects the sectors failure to create enough jobs.

Aldaba also noted that the performance of micro, small, and medium enterprises (MSMEs) had been subdued, pointing to weak linkages with large enterprises. While MSMEs represent 91 percent of total establishments, they account for only a third of employment, 19 percent of value added, and just 10 percent of exports.

Aldaba said the Philippines needs a roadmap for structural transformation to make the manufacturing sector globally competitive. For example, Thailands 1997 Industrial Restructuring Program provided USD$1.19 billion to upgrade 13 identified industries and boost their competitiveness. As a result of structural transformation, the total employment share of Thailands manufacturing sector hit 14.9 percent for the period 2006 to 2010, larger than Philippine manufacturings employment share of only 8.7 percent for the same period. GDP per capita of the Philippines was lower at USD$2,588 compared with Thailands USD$5,474 in 2012.

The Department of Industry and the PIDS are collaborating to establish an industrial roadmap, and PIDS serves as an advisor to help manufacturing sector players in crafting their respective roadmaps, said PIDS President Llanto.

The forum was held last Oct. 16 as part of the House of Representatives Month as well as to engage congressional staff and other government agencies in dialogue on industrial policies. We hope to carry this forward in ensuring the continuity of this initiative of having greater dialogue between private and public sectors, said Romulo Miral, OIC director-general of CPBRD.

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Policymakers should employ information technology (IT) to drive innovation in the countrys health sector and make health care more accessible and affordable to Filipinos.

An expert from the Philippine Institute for Development Studies (PIDS) noted that there has been very poor adoption of existing IT assets in the Philippines when it comes to health, compared with other Asian countries.

The innovative use of IT was among the topics highlighted during the observance in September of the 11th Development Policy Research Month (DPRM), which had the theme Making Health More Inclusive in a Growing Economy.
PIDS Senior Health Research Consultant Oscar Picazo lamented the lack of IT in health care service delivery in the country despite being the outsourcing capital of the world.

There is IT innovation in India that benefits millions of poor people in rural places in the delivery of health services, Picazo said. For instance, poor patients in rural places in India receive medical prescriptions from physicians in Bangalore using computer laptops.
Picazo also highlighted the use of teleradiology in India, which relies on outsourcing services to interpret radiological patient images such as x-rays, computed tomography scans (CT), and magnetic resonance imaging (MRI). Teleradiology is applicable to the Philippines as it allows effective transmission of radiological patient images from city hospitals to rural hospitals, he said. It will also minimize barriers of distance or location when it comes to health service delivery.

The Department of Health (DOH) already has a number of systems in place, however, said Dr. Irma Asuncion, director of the National Center for Disease Prevention and Control.

The Department of Health has decided to put up the Maternal and Neonatal Death Reporting System (MNDRS), the Unified Non-Communicable Disease Registry System, and the Online National Electronic Injury Surveillance System (ONEISS), she said during the DPRM press conference last September. The facility systems will allow DOH to have accurate data of mortality rates, especially on maternal and neonatal death cases, she explained.

Telemedicine is present in the country and the DOH targets to expand it by 2014, Asunsion said. A total of 389 rural health units are actually involved in telemedicine and hopefully we will expand it by 2014 to 450 RHUs, she added.