Trade Secretary Ramon Lopez is pushing for capacity building in manufacturing, agriculture, and services as the country rebuilds its economy from the impact of the coronavirus disease 2019 (COVID-19) pandemic.
Speaking at the National MSME Week e-forum recently, Lopez said the country should further strengthen its capacity building to be able to supply local demands and lessen importation.
“It’s important to do the capacity here and really try to reduce imports and address also the trade deficit.”
“The more that we have the capacity, the more we will have the capacity to produce and supply the local demand. We don’t need to import because we are able to increase already that capacity. So, it’s important to do the capacity here and really try to reduce imports and address also the trade deficit,” the trade chief stressed.
The trade head said since the government eased the community quarantine measures and allowed the reopening of more economic activities, performance of the manufacturing sector has improved.
Manufacturing purchasing managers index (PMI) has recovered close to stable condition in June 2020 with a score of 49.7 after hitting its record-low of 31.6 in April, he said.
Lopez added overall manufacturing capacity utilization also improved from 71.2 percent in April 2020 to 73.4 percent in May.
Output index likewise increased from 10.2 percent in April to 29.4 percent in May, and 51.1 percent in June, he pointed out.
“Micro SME is part of that industrial capacity that we are trying to build.”
“While we are solving problems, we are still looking at modernizing and continuing with an integrated industrialization strategy. And micro SME (small and medium enterprises) is part of that industrial capacity that we are trying to build,” Lopez emphasized.
He underscored the need to go into higher-value products and services as part of the global value chain.
“We need to produce higher value from our industries and services so we have better participation in the global value chain. Let’s say for electronics, we produce higher design components to increase the value of the products that we produce. There is (a) premium in their value,” Lopez added.
He further said improving the capacity building of different sectors in the country is part of the “building back better” of the Philippine economy.
As the country modernizes and integrates industrial capacity, moves to higher-value products in the global value chain, and contributes to socio-economic development such as building vital infrastructure, Lopez added the government is looking to reduce trade deficit, increase value creation, increase backward and forward linkages, and modernize Philippine industries.