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SMART Program to Digitise the Philippines’ Manufacturing Sector

Philippines Securing Manufacturing Revitalization Transformation SMART Program
Photo Credit: Department of Trade and Industry

Department of Trade and Industry (DTI) Secretary Ramon M. Lopez recently unveiled the Securing Manufacturing Revitalization & Transformation (SMART) Program during the Manufacturing Summit 2019.

Speaking to business leaders and manufacturers present, he reportedly expressed his support for the program’s objectives of revitalising the manufacturing sector.

This will allow the sector to continue its high growth trajectory as well as help them transition to Industry 4.0.

Philippines Securing Manufacturing Revitalization & Transformation (SMART) Program

The program will support projects that are performance-based, targeted, time-bound, and transparent.

In addition, the SMART program will support the following:

  1. Adoption of Industry 4.0 technologies
  2. Upgrading of processes
  3. Upgrading of products
  4. Upgrading services
  5. Development of new business models

The Department proposed to spend PHP 25-30 billion (US$ 493 – 592 million) in order to provide support for small, medium, and even large companies for a period of 3 years.

There is a plethora of ways in which the program will be supporting the industry. These are:

  1. Soft loans
  2. Grant vouchers
  3. Incentives through the Strategic Investment Priorities Plan (SIPP)
  4. Safeguard measures
  5. Fund support, which is similar to the Comprehensive Automotive Resurgence Strategy (CARS) Program
  6. Reduction in trade barriers

Criteria will be considered in the selection of the firms that will be under the SMART program. This includes:

  1. Global Value Chain upgrading
  2. Social Benefits and externalities such as Electric Vehicle like E-PUV, E-jeepneys, E-trikes, E-buses
  3. Adoption of Industry 4.0 technologies to catalyse manufacturing growth and the economy
  4. Innovation, R&D, commercialisation of market-oriented research
  5. Emerging industries, clusters & activities that would address gaps in supply/value chains
  6. Industrial development in rural areas

Philippines Smart Program Recipients

The Department is currently eyeing the following programs for funding support under SMART:

  1. The ECO-PUV Program

This includes the manufacture of jeepneys using both ICE & EV technology, Parts & components of OEM platform & Eco-PUV body, and Production volume & fixed investment support.

  1. DTI-National Development Corporation Co-investment Program

This program identifies Co-fund innovation projects to develop new products, new capabilities, provides funding assistance for developing & testing technology projects, and bestows Matching Grants.

  1. EV Incentive Scheme (EVIS) Program

This program provides CARS-like incentives (fixed and production volume incentives) to electric vehicle production. Examples are E-jeepneys, buses, trikes, motorcycles.

  1. Industrial Transformation Program

This program would provide support to companies that are shifting to Industry 4.0 technologies such as digitalisation and automation to improve productivity.

The SMART program fully supports the new flagship industrial strategy of the government as it is consistent with the Philippine Development Plan, the i3S (Inclusive Innovation Industrial Strategy), and the inclusive Filipinnovation & Entrepreneurship Roadmap.

Other government programs

In a recent report by OpenGov Asia, innovation is key in Philippine – Japan Trade and Investment Relationship.

It highlights how i3S puts innovation at the heart of the Philippines’ industrial policies.

The aim of i3S is to grow innovative and globally competitive manufacturing, agriculture, and services while strengthening their linkages into domestic and global value chains with innovation at the core of the country’s strategic policies and programs.

OpenGov Asia earlier reported on Inclusive Filipinnovation and Entrepreneurship, key for Philippine economic development.

Filipinnovation or Filipino Innovation will serve as the strategic tool for the country’s economic development as it is a project for entrepreneurs.

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