THE government should take the lead in beefing up investments in the manufacturing sector, a traditional politician seeking higher office said.
Sen. Francis Escudero said more government-led and made-in-the-Philippines industries will not only benefit the economy but will also address problems, such as joblessness and criminality, which are fueled by poverty and lack of livelihood and employment opportunities.
Citing the Philippine Statistics Authority, Escudero said the number of jobless persons reached 2.37 million in the country in October.
Among the unemployed, 63.4 percent are male. The age group 15 to 24 comprised 48 percent and the bracket 25 to 34 years old 32.1 percent.
Creating a stronger manufacturing sector will also lessen the country’s dependence on imported raw materials, which also increases production costs and prices, according to Escudero.
Not too many invest in the manufacturing sector, although this is what the country needs to create jobs and opportunity to earn livelihood, he said in Filipino. If we look at the situation, almost all of the big investors have invested their capital in the services sector, he added.
Escudero believes the government should step in to fill the gaps that are left by the private sector.
“The government should not think twice about a government-led industry that can be established in the country,” Escudero said. “Then if later on it decides to privatize the operation and maintenance, it can very well do so. But what’s important at this point is for the government to take the lead.”
Given the huge capital required to set up industries, such as steel-making, the government could either put up its own plants or develop a credit scheme for businessmen who want to venture in the manufacturing sector, but lack funds to do so, he explained.
Government data showed that the manufacturing sector “comprises more than half of the Philippines’s industrial sector and accounts for almost a quarter of the country’s gross domestic product [GDP].”
Government data also showed the manufacturing sector grew by 10.5 percent in 2013 and 8.1 percent last year, from an annual growth rate of 5.4 percent in 2012.
The sector, however, is a far second to the services sector in terms of contribution to the country’s 6.1- percent GDP growth, or P12.63 trillion, in 2014.
On the other hand, the services sector’s gross value-added contribution reached 57 percent last year, making it the “strongest and fast-growing sector of the Philippine economy,” compared to its 36.6-percent contribution in the 1970s. It has also grown by an average of 6.3 percent from 2000 to 2014.