The Philippines must diversify its growth drivers and harness its natural resources to strengthen its competitiveness in the region, the Chamber of Commerce of the Philippine Islands (CCPI) said.

"We don't want to focus on only one industry, we must be diverse and self-sufficient," CCPI President Jose Luis U. Yulo, Jr. said at the 15th Arangkada Philippines Forum on Friday, a venue where business chambers air policy calls before government. "That is how the Philippine economy was in the past, and we deviated," he added.

The stakes are visible in the regional growth table. The country is projected to be among the slowest-growing economies in developing Southeast Asia this year, expanding 3.3%, according to the Asian Development Bank's September update. That places it behind Vietnam (7.8%), Indonesia (5.2%), Malaysia (4.9%), the Lao People's Democratic Republic (4%), Timor-Leste (4%) and Cambodia (3.9%) — less than half the pace of Vietnam, the fastest-growing of the group cited.

Mr. Yulo, who heads the Philippines' oldest business group, established in 1886, said the country should reduce its reliance on global supply chains by manufacturing locally with its own natural resources. He noted that many regional neighbors have already built self-reliant manufacturing industries that use natural resources as inputs for their production-based industries. By contrast, the Philippines exports natural resources such as raw copper to overseas processing centers, then imports the high-value outputs back at a higher cost — a pattern that leaves the value-adding stages of production, and the income they generate, outside the country.

"That is one of the reasons why we are poor," he said. "China, Indonesia, our neighbors are already practicing this—whatever natural resources they have, they use it in local factories," Mr. Yulo said.

As an archipelago, he added, the Philippines should also tap its aquatic resources to excel in sea-based manufacturing industries.

He further called for reforms in health and education, saying investment in human capital is critical to bolstering growth — pairing his industrialization pitch with the workforce foundations such a shift would require.

Separately, the American Chamber of Commerce of the Philippines (AmCh) urged government leaders to accelerate critical economic reforms, arguing that these are not moving fast enough to sustain economic resilience.

"The economy is pretty resilient right now and improving as we speak, but we really need sustained high growth," AmCham Executive Director Ebb Hinchliffe said during the forum. "Bills become laws, and then the laws are implemented, but we don't feel [like] they're moving fast enough."

With both chambers pressing the same point from different vantage points at the same forum, the near-term markers are whether government acts on the reform agenda and how the Philippine projection fares in the ADB's next outlook update.

— Beatriz Marie D. Cruz

Source: Bworldonline