Philippine Daily Inquirer
1:24 am | Monday, May 5th, 2014
The development of the Philippine automotive sector will be highly crucial in the resurgence of the country’s manufacturing industry, as it can drive the growth of feeder industries across the supply chain.
“At the heart of the Philippine Manufacturing Industry Roadmap for Structural Transformation is the development of the automotive industry through its integration into the production and sales system of global automakers,” Trade Assistant Secretary Rafaelita M. Aldaba said.
Aldaba pointed out that a car has over 30,000 parts and its construction is dependent on metal, chemical, plastic, textile, rubber, glass, steel, electrical and other manufacturing subsectors.
“Through inter-industry and supply chain linkages, auto manufacturing can have a large multiplier effect in an economy because any expansion in the automotive industry drives growth in feeder industries. While the Philippines’ domestic production of automobiles is currently limited, there are clear opportunities to increase production as the country’s middle class grows and AEC integration creates an open market of over 600 million people,” the trade official explained.
The Philippine government is currently threshing out a new automotive roadmap that will outline the strategic direction, policies and new incentives needed to make the automotive industry more competitive. Its issuance, however, continues to be delayed.
According to Aldaba, the “New Auto Program” will be aimed at attracting foreign direct investment in assembly and component manufacturing to enable the Philippines to depend its participation in the global value chains of multinational companies.
“Global value chains are a new form of industrial organization, where different stages in the construction of a finished good are located in different geographical areas in order to minimize production costs. Suppliers of components usually follow where assemblers locate their operations. This has been the experience of several emerging market economies including China, Brazil and Thailand,” she further said. Amy R. Remo
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