The Philippines’ potential to progress to high-income country status is dependent on the agriculture and manufacturing sectors’ long-term development, according to the National Economic and Development Authority (NEDA).
“If we are to grow and sustain our upper middle-income country status and eventually move up to high-income country status in the next two decades, we have to focus on agriculture and manufacturing. A strong, productive agriculture sector will provide a very good foundation for a competitive manufacturing sector,” Socioeconomic Planning Secretary Karl Kendrick Chua said as he emphasized the importance of the manufacturing sector in the Philippines during the Department of Trade and Industry-Board of Investments’ Manufacturing Summit held on August 26.
Agricultural laborers are often absorbed by the manufacturing sector in nations that undertake successful structural transition, according to Chua. This opens the way for a high-tech, capital-intensive industrial sector, followed by a high-skilled services sector.
However, in the Philippines, the share of agriculture and manufacturing to the gross domestic product has been stagnant. Moreover, agricultural workers typically migrate to informal services.
“What we need to do, moving forward, is to make sure that manufacturing, aided by agriculture, actually helps pave our growth path towards our 2040 vision of becoming a high-income country. That is why this administration has put strong importance on achieving our 10-point socioeconomic agenda. This will support the growth of manufacturing,” Chua said.
For instance, the government’s prudent macroeconomic policy has resulted in the highest ever credit rating of the country.
Meanwhile, the Ease of Doing Business law simplified transactions by reducing the maximum processing days of permits, licenses, or other documents that businesses require from the government.
This enables micro, small and medium enterprises (MSMEs) to easily participate in the formal sector.
He added infrastructure spending is crucial in building and developing the country’s manufacturing sector, as it relies heavily on the movement of people and goods.
Chua said the government will continue to invest in infrastructure because it is an important indicator that will pave the way for the economy’s robust growth in the future.
“All of these are important elements to support the growth of our manufacturing and agriculture sector and bring us out of the Covid-19 crisis sooner,” he added.