The Philippines is pushing for greater integration in the services sector among Asia-Pacific Economic Cooperation (Apec) economies, according to the National Economic and Development Authority (Neda).
Neda Deputy Director General Emmanuel F. Esguerra, who serves as the convener of the Apec Group on Services (GOS), said this will boost the country’s own services sector and contribute to the government’s goal of attaining inclusive economic growth.
“Services is the largest economic sector and is a major employer in most Apec economies, including the Philippines,” Esguerra said.
“This is a manifestation of how big our services sector is. Yet, there are still underlying potentials that must be tapped and developed. The Apec fora provide good venues to pursue these,” he added.
For the First Senior Officials’ Meeting (SOM1) of the GOS, the Philippines, along with other Apec member-economies, aims to enhance current initiatives by building on last year’s developments and focusing on the integration of small and medium enterprises (SMEs) into the services global value chains (GVCs).
Many services are being undertaken in the production and sale of a product, whether it is a good or a service. Other sectors, such as manufacturing, have a number of services embedded in their processes.
These include design, quality control, inventory systems, transport, logistics, wholesale/retail, marketing/advertising, repair/maintenance, installation/construction and finance after-sales services.
Firms in the services sector, themselves, also outsource or move their noncore services functions offshore to their affiliates, as they seek to move up the value chain. The services then become value added to the final product.
“This ‘tasking’ in the production process of firms, or in the GVCs, are where opportunities for SMEs in the services industry reside,” Esguerra said.
“These are only among the reasons the government is keen on enhancing regional cooperation and engaging in partnerships in services. In our pursuit of inclusive growth, services open numerous opportunities for employment generation and poverty reduction—goals that we have set in the Updated Philippine Development Plan 2011-2016,” he added.
Neda data showed that in 2014, services grew by 6 percent and generated 599,000 jobs, the highest among the country’s major sectors.
Esguerra said the country’s services sector accounted for 56.7 percent of its gross domestic product and 53.6 percent of total employment in 2014.
For the Apec region, total services exports account for 20.27 percent. However, when viewed through a value-added lens, services share to total exports increases to 39.08 percent.
The Neda is also host to four other related meetings of the Apec SOM1 from January 31 to February 7, in Clark Freeport Zone, Pampanga.