Just recently, two out of the three major credit rating agencies, namely Fitch and S&P, have upgraded the Philippines to investment grade. The country posted a first quarter growth rate of 7.8% for 2013.
My country is thriving, and there are three core reasons why.
First, an outsourcing boom has increased the number of foreign direct investments, resulting in more jobs for Filipinos. This leads to more dispensable income, which in turn fuels cash-based domestic consumption.
Second, the anti-corruption initiatives of President Aquino’s administration have made it very clear that no stones will be left unturned. Aquino is staying true to his campaign promise and message that “There is no poverty if there is no corruption.”
Finally, the continuous remittance from overseas Filipino workers provides a steady influx of dollar reserves, an increasing percentage of which is now invested in the real estate industry. That industry is fueling economic growth through infrastructure and domestic consumption.
However, there is still a long way to go before the Philippines cements a truly strong economy. To start with, we’ll need a resurgence of the manufacturing sector, especially in semiconductors and electronics. This would re-invigorate the country’s exports and increase high-value, high-impact investments in the Philippines.
One of the biggest manufacturing companies in the country, Ayala-owned Integrated Micro-Electronics Incorporated (IMI) has been serving foreign electronics makers, especially those from Japan. IMI’s specialization ranges from product conceptualization to mass manufacturing, so the company needs to ensure that its human capital is highly efficient and competitive in value creation.
One of IMI’s strategic initiatives to address this need is the cultivation of a culture that drives performance and innovation across all of its 17 sites worldwide. IMI is also heavily investing in manpower training and development programs aimed at competencies for optimum job performance and customer satisfaction.
Of course, IMI is just one of the several semiconductor and electronics companies in the Philippines. Others may not be able to invest the same level of resources in human capital. After all, the classic notion of managing a technology-driven business is more focused on driving down costs, despite potential long-term gains.
The fact is, the government of the Philippines cannot fully delegate improvement of per-employee productivity to a single entity in such an important industry. Improving technical skills and human capital as assets will be indispensable if the Philippines wants to sustain its current growth. Therefore, the role of the government must be to give more funds to existing capacity and capability build-up programs.
In 2009, a partnership with the Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI) was implemented by the Technical Education and Skills Development Authority (TESDA), which aimed to upgrade skills during the global financial crisis. These measures were purely reactive, but could serve as a model for more meaningful and proactive training and education.
One option is to start science and technology training at a very young age through existing academic institutions. In this era of Bill Gates and Mark Zuckerberg, where the world’s economies are moving faster than ever, President Aquino must expand his priorities in education, or else miss out on this opportunity to build a solid foundation for the future economic stability of the Philippines.