ASEAN 2015: Implications on Philippine Human Resource
Development
Undersecretary Adrian S. Cristobal Jr.
Department of Trade and Industry Managing Head, Board of Investments
2nd National Technology Vocation Congress
SMX Convention Center, Pasay City29 October 2013
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Outline
• ASEAN Economic Community (AEC) and PH Manufacturing
• Resurgence of Philippine Manufacturing
• Our Strategies
• HRD: Matching Skills with Industry
Needs
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ASEAN Economic Community
& PH Manufacturing
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Source: Asian International Economists Network, ADB
Distributed Manufacturing
CURRENT SITUATION AND GLOBAL OPPORTUNITIES
Disrupted Supply Chain in Neighboring Countries
• Rising labor cost in China
• Calamities in Thailand & Japan
• Increasing tension between Japan & China
• Labor disputes and strikes in China & Vietnam
• Aging Asian Countries
Renewed optimism in Japan - “ABENOMICS”
ASEAN Economic Community in 2015 and Other
FTAs
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Ten member states at varying levels of economic development
Population of 616 million people
Combined income (GDP) of US$ 2,306 billion
Average GDP per capita of US$ 3,744
Total exports (to world) of US$ 1,265 billion
Total imports (to world) of US$ 1,243 billion
Total intra-ASEAN trade of US$ 33 billion
ASEAN at a Glance (2012)
Source of data: World Economic Outlook April 2013 Database, International Monetary Fund; TradeMap, International Trade Center
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ASEAN and Its Partners
Entry Into Force (EIF) 2005 Market Size (MS) 1.97B Economy Size (ES) US$ 10.6T Total Trade (TT) US$ 319B
EIF 2007 MS 647M ES US$ 3.5T TT US$ 131B
EIF 2008 MS 726 M ES US$ 8.3T TT US$ 262B EIF 2010
MS 1.81B ES US$ 4.3T TT US$ 76B EIF 2010
MS 625M ES US$ 4.0T TT US$ 79B
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Non-FTA Partners
FTA Partners
Source: NSO
PH Top Markets, 2012
“FREE FLOW OF GOODS” WAS SUBSTANTIALLY ACHIEVED WITH THE REALIZATION OF THE AFTA IN
2010
…Percent of Total No. of Tariff Lines at ATIGA 0%
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Brunei
Darussalam
99.03%
Indonesia 98.66%
Malaysia 98.68%
Philippines 98.63%
Singapore 100%
Thailand 99.84%
Percent of Total No. of
Tariff Lines at ATIGA 0% - 5%
Cambodia 98.53%
Lao PDR 95.18%
Myanmar 99.28%
Vietnam 99.68%
*Based on:
1. AFTA-CEPT Packages from the ASEAN Secretariat website
2. Okabe, M. and S. Urata (2012), The Impact of Trade Liberalization in ASEAN on Intra-ASEAN Trade flows (mimeo)
Trade in Goods
As of 2010, all duties have been eliminated on agricultural and industrial products
Except for: live swine, live chicken, meat of swine, meat of chicken, manioc (cassava) and sweet potatoes, maize, rice and sugar
Duties maintained at 5% beyond 2015 for (1) Live swine; (2) Live chicken; (3) Meat of swine; (4) Meat of chicken,
turkeys, ducks, geese and guinea fowls; (5) Manioc (cassava) and sweet potatoes; and (6) Maize.
Rice duty at 40% until 2014; 35% by 2015
Sugar Duty: 18% (2013) ; 10% in 2014; 5% in 2015
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Trade in Goods
PH Trade deficit with ASEAN
2012 2011 2010 2009 2008 PH Trade Deficit with
ASEAN (4,307) (5,601) (3,947) (5,124) (7,543) - Without oil
(2,051) (3,622) (791) (3,404) (4,645) - Without oil & rice
(1,716) (3,265) 594 (2,465) (3,010) - Without oil, rice &
petrochemicals (1,095) (2,658) 1,102 (2,219) (2,705) - Without oil, rice,
petrochemicals &
automotives
(554) (2,105) 1,808 (1,638) (2,291)
In US$ Million
Source: NSO (processed by BITR)
PH Trade with ASEAN (2012)
Top 10 Imports from ASEAN
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Product Group %
Share 1 Electrical, electronic equipment 20.0 2 Mineral fuels, oils, distillation
products
14.8 3 Machinery, nuclear reactors, boilers 11.4 4 Vehicles other than railway, tramway 8.9 5 Plastics and articles thereof 5.7 6 Miscellaneous edible preparations 3.0 7 Animal, vegetable fats and oils,
cleavage products
2.5
8 Cereals 2.1
9 Essential oils, perfumes, cosmetics, toiletries
1.9 10 Optical, photo, technical, medical,
etc apparatus
1.9
Top 10 Exports to ASEAN
Product Group %
Share 1 Electrical, electronic equipment 59.5 2 Machinery, nuclear reactors, boilers 8.4 3 Vehicles other than railway, tramway 5.1 4 Mineral fuels, oils, distillation
products
3.0 5 Optical, photo, technical, medical
apparatus
2.7 6 Copper and articles thereof 2.1 7 Tobacco and manufactured tobacco
substitutes
1.8 8 Cereal, flour, starch, milk
preparations and products
1.3 9 Rubber and articles thereof 1.2
10 Fertilizers 1.2
Source: ITC Trademap, August 2013
PH Trade with ASEAN
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• Our (growing) trade with ASEAN is largely intra- industry in nature (we trade in products
belonging to the same industries)
• Electronics: We export intermediate components but import finished products
• We sell Thailand motor vehicle parts; they sell us motor vehicles
• Our trade relationship in ASEAN are largely
complementary rather than competitive in nature;
opportunities lie in regional (and global) value
chains
AEC & PH Manufacturing
PH Manufacturing Industries are already competing in an open regional market.
Our key industries are integrated in regional and global supply chains.
We are the fastest growing economy in the fastest growing region,
amidst global uncertainty.
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Manufacturing Resurgence
GROSS NATIONAL INCOME by INDUSTRIAL ORIGIN
Percent Share to GNI, At Constant Prices 1st Half, 2013
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Manufacturing Performance
• 6.6% growth rate in total Gross Revenue Index, Q1 of 2013
• 9.7% GVA output in manufacturing relative to GDP, Q1 of 2013
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Our Strategies
Develop priority industries
Support industry initiatives
Provide protection and security
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Industry Roadmapping Project
On 30 January 2012, the DTI-BOI launched the Industry Development Program (IDP).
To date, 21 sectoral roadmaps have been
submitted to the DTI and forwarded to PIDS;
nine (9) have been presented in Trade &
Industry Development (TID) updates.
The sectoral roadmaps serve as the building
blocks of the Manufacturing Industry Roadmap (MIR) and the Comprehensive National Industrial Strategy (CNIS).
The Manufacturing Industry Roadmap was
presented in the first TID Update (August 2013).
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Completed Sectoral Roadmaps
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Roadmaps under Development
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Major cross-sectoral issues
• Infrastructure
• Logistics
• Power and Energy
• Research & Development
• Human Resource Development
• Local Government Regulations
• International Marketing &
Promotions
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Identified gaps in HR Skills &
Training Requirements
Manufacturing Employment
Accounts for 14.5% of employment (3,171,000 jobs)
Among PH’ Strengths
• Industrial peace
• Pool of young, trainable, English speaking workers
Identified Constraints
• Need for skilled workers, need for
trainings
(Metal casting, tool & die, auto & motorcycle parts, furniture, chemical, rubber, plastic, iron & steel)22
Sectors Type Auto parts, Tool &
Die
Design, tool making, prototyping, molding, die & casting
Chemical, Rubber, Plastics
Chemical engineering, Materials Engineering
Furniture Supervisory, managerial, consultancy for improved productivity
Metal casting Foundry technology, Metallurgical
Engineering, Mechanical Engineering, Industrial Engineering, Metal casting Engineering
Tool & Die Die design, Tool & Die Engineering Iron & steel Vocational trainings (TESDA)
Critical and In-demand Skills / Training requirements
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PHILIPPINE DAILY INQUIRER, 06 AUGUST 2013
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CONCLUSION
Often, we underestimate our capabilities.
Our people are our biggest asset.
ASEAN 2015: Implications to Philippine Human Resource Development
Undersecretary Adrian S. Cristobal Jr.
Department of Trade and Industry Managing Head, Board of Investments
29 October 2013
SMX Convention Center, Pasay City
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