As most global economies continue to reel from the impacts of the COVID-19 pandemic, the Philippines chooses to play a different ball game by accelerating growth through the adoption of digital technology.
To further streamline the government’s digital transformation, the Department of Trade and Industry (DTI) called on key industry players to boost the Philippines’ manufacturing sector by making processes “smarter”.
Trade Secretary Ramon Lopez emphasised the role of innovation as an enabler of economic change and sustained competitiveness in various sectors. His advice is to keep the ball rolling by being resilient and by keeping an innovative mindset. He added: “We need to stay the course to sustain the resurgence of local manufacturing, which should involve the digital transformation of our industries. To be resilient, Philippine manufacturing must evolve – faster, better, and smarter.”
The trade and industry department made this statement during the virtual Manufacturing Summit 2020, an annual event where stakeholders from the public and private sectors gather to discuss the performance of the country’s manufacturing sector and to put forward possible solutions to improve the industry.
Aside from supporting the adoption of innovation among enterprises, participants during the Summit raised their points on government policies that can ramp up the economy and urged manufacturing enterprises to employ new business models.
Innovation in an enabling policy environment
Throughout the virtual event, several themes were laid on the table for discussion. With regard to innovation, speakers highlighted the major role that the government plays in fostering an environment of innovation among businesses. Government organisations must step up in ensuring a conducive policy environment, particularly in the manufacturing sector, to promote investment.
The utilisation of technology should likewise be made alongside the implementation of flexible and adaptive business frameworks. The latter, key speakers noted, is essential for businesses to thrive and be more globally competitive and resilient in the course of the new normal. Participants also emphasised the need to retrain and bank on skills enhancement of their workforce as businesses transition to a digital workplace.
Close collaboration with the government and members of the academe is also key to make enterprises more equipped to handle digital transitions and future disruptions. The Summit was concluded with a strong emphasis on the significance of embracing an Industry 4.0 mindset by strengthening the sustainability of Philippine industries. This can be done through integration into the digital economy and fostering collaboration with global and regional market players.
The DTI also discussed opportunities that Micro, Small and Medium Enterprises (MSMEs) may avail of following the approval of the Regional Comprehensive Economic Partnership (RCEP) and the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill. The RCEP aims to expand the economic undertakings of the Philippines with trade partners and make the Philippines a manufacturing hub in Asia.
Meanwhile, the Trade Secretary noted that under the CREATE bill, MSMEs shall enjoy a 10% reduction in their corporate income taxes. This is particularly applicable for domestic companies with total assets not exceeding P100 million (US$ 2.1 million).
The positive impact of digital technology is seen in other cornerstone sectors of the economy. Because of this, the Philippine government has been steadily amplifying its digitisation journey in agriculture, healthcare and even in the banking industry. In a recent report by OpenGov Asia, the Bangko Sentral ng Pilipinas (BSP) announced that it has recorded a boost in investments after it employed a digital finance scheme. The Digital Personal Equity and Retirement Account (PERA) programme aims to boost savings of retired Filipinos living here and abroad. The Central bank said that following the launch of the system in September, it has recorded an increase of almost 50% in the number of investors of Digital PERA. Because of the success of the new system, the BSP said it is considering recommendations to raise the ceiling of PERA investments.
