Labor in a De-Indusrialized Philippines: Rebooting Manufacturing Towards Sustainability

Type Conference Paper - The Quality of Growth and Employment under the Aquino Administration
Title Labor in a De-Indusrialized Philippines: Rebooting Manufacturing Towards Sustainability
Publication (Day/Month/Year) 2015
City Pasig City
In 2003, Dr. Josef Yap raised the urgent need to have a stock-taking on the existing economic
orthodoxy given the ―lingering economic malaise‖ and the failure of Philippine manufacturing to
grow compared to the success of Japan and other East Asian countries, including the late-comer
China. Dr. Yap later became the President of the Philippine Institute for Development Studies
(PIDS). In 2011-2012, he organized in coordination with the Department of Trade and Industry
(DTI) a program to revive Philippine manufacturing through a series of industry ―road mapping‖.
But back to 2003, Dr. Yap wrote:
“Mainstream economics has been at the forefront of Philippine development policy for nearly 31 years. While
the first major tariff reform program began in 1981, the actual paradigm shift in Philippine development
policy occurred as early as 1972. Two pillars of the orthodox school became the economic managers at that
time: Cesar E. A. Virata and Gerardo P. Sicat. The greater part of the reform effort was concentrated in
the Philippine trade sector, with programs revolving around tariff reduction, elimination of import quotas, and
phasing out of subsidies. The explicit goal of these measures has been “export-led industrialization” in
contrast to the earlier strategy of protectionism cum import-substitution.”
In 2012, or ten years after Yap raised the need for stock-taking on the existing economic orthodoxy,
another maverick economist, Norio Usui of the Asian Development Bank (ADB), came up with an
equally blunt assessment of Philippine industrialization: ―stagnant‖ through the decades. And in a
marked departure from the usual IFIs’ prescription of deepening economic liberalization as the
growth panacea, Usui pointed out that the economy is not sustainable if it is simply dependent on
two legs: the migration remittances and the booming call center industry. Instead, he called the need
for government to be more decisive in promoting industrial upgrading by targeting the development
of what Usui calls as ―nearby products‖ or higher value-adding products in the electronics and other
industries. Surprisingly, the ADB gave wide publicity to Usui’s book Taking the Right Road to Inclusive
Growth: Industrial Upgrading and Diversification in the Philippines (Usui, 2012) and even organized public
forums based on the foregoing recommendations of Usui.

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