06

Revitalize Industry
CHAPTER 6

Revitalize Industry
To generate more quality jobs and competitive products, the industry sector will be revitalized by
expanding the domestic market and supplier base, moving up the value chain, and enhancing linkages
across sectors. Moreover, to drive industrialization forward, accessibility, particularly of micro, small, and
medium enterprises, to a dynamic science, technology, and innovation ecosystem will be ensured.
This chapter presents the challenges to revitalizing industry and the outcomes to be pursued to
address these challenges during the Plan period. These outcomes are: (a) domestic market production
and supplier base expanded, (b) moving-up the value chain achieved, (c) competitiveness improved,
(d) dynamic industry ecosystem created, and (e) inter-sectoral linkages enhanced.

Assessment and Challenges

Before the coronavirus disease (COVID-19) manufacturers have shown resilience, growing
pandemic, the Philippines had a growing at 5.8 percent in 2019-2020 despite the
industry despite structural weaknesses. lockdowns. Electricity, steam, water, and waste
Despite difficulty in attracting foreign direct management sector also showed a minimal
investments (FDI), restrictions to foreign decline of 0.4 percent in 2019-2020 despite
equity and the lack of advanced science, prolonged periods of community quarantine.
technology and engineering skills, industry
showed a strong performance from 2010 to Businesses have turned to digital tools,
2019, growing at an average of 6.4 percent especially for marketing and payments
annually. This growth was driven by robust during the pandemic, evidenced by the
growth in construction (10.0%); electricity, significant growth in e-commerce. Driven by
steam, water, and waste management (5.7%); strict lockdowns as well as a tipping point in
and manufacturing (5.6%) over the same the adoption of certain digital services, the
period. Philippines’ 2021 Gross Market Value (GMV)
reached a total of USD17 billion—a notable
COVID-19 reversed industry performance. 93 percent year-on-year (y-o-y) surge. This
The imposed lockdowns have wiped away the steep increase is underpinned by a 132 percent
gains from previous years, resulting in the growth in e-commerce. In addition, 39 percent
contraction of the industry sector (–13.1%) of digital merchants believe that they would not
with construction (–25.5%), and mining and have survived the pandemic if not for digital
quarrying (–18.6%) reporting double-digit platforms. Digital merchants are reported to
declines. have used an average of two digital platforms
in that year.1
Yet, we have seen some bright spots in the
midst of the pandemic. Pharmaceutical

Chapter 6 Revitalize Industry | 137

In the first half of 2022, economic recovery Still, certain industry sectors are already
has become more broad-based as many considering adopting modern technologies.
industry subsectors have surpassed Food manufacturers are exploring the
pre-pandemic performance. Electricity, applications of artificial intelligence (AI), the
steam, water, and waste management (9.9%) Internet of Things (IoT), and synthetic biology
have exceeded pre-pandemic growth. For (plant-based alternatives for meat products).
the manufacturing sector: wood, bamboo The Semiconductor and Electronics Industries
cane, and rattan (31.3%); chemicals (29.1%); in the Philippines Foundation, Inc. is also
paper (19.2%); furniture (13.3%); electronics optimistic about the opportunities that will
(8.9%); food products (4.9%); and fabricated be provided by emerging technologies, such
metals (4.2%) have all reported production as metaverse, automotive AI, advanced driver
expansions higher than their 2019 figures. assistance systems, and augmented reality.5

Recovery can also be seen in the rebound Rapid global inflation is clouding the
of employment generation. Employment outlook for sustained manufacturing
generated in the industry sector totaled growth. The Philippine manufacturing
446,000 in January–May 2022, indicating a sector is projected to take a hit from high
high likelihood that the full-year 2022 target global inflation mainly brought about by the
of 200,000 will be surpassed given sustained prolonged Russia–Ukraine conflict. While
economic growth momentum. Manufacturing domestic demand may have continued to
contributed about 52 percent to employment sustain the domestic manufacturing sectors,
generation in industry, followed by the rising import cost of inputs and fuel prices,
construction at 41 percent. and the slowing down of manufacturing
activity in major economies6 may be a drag
Looking forward to the next 5 years, challenges
on the domestic manufacturing sector. The
to industry development remain but also
Purchasing Manager’s Index (PMI), declining
opportunities abound.
from 54.1 in May 2022 to 52.6 in October
Philippine manufacturing continues to 2022, has already shown indications of slowing
have low technology utilization with most manufacturing activity.
companies2 still transitioning from Industry
The constraint placed by international
2.0 to Industry 3.0.3 In addition, micro,
sanctions on Russian export of cobalt, a key
small, and medium enterprises (MSME) in
input in the production of batteries, provides
manufacturing have, at most, low technological
opportunities for the Philippine mining and
readiness for the Fourth Industrial Revolution
manufacturing industries. The Philippines and
or Industry 4.0. Most MSMEs admitted that
Russia have roughly similar amounts of cobalt
they are not yet ready for revolutionary changes
reserves and fall within the top six country
in their organizations, citing top barriers to
sources of cobalt, after Australia, Cuba, the
technology utilization such as the high cost of
Democratic Republic of Congo, and Indonesia.
technologies, lack of infrastructure, absence
Although the Philippines produces nickel-cobalt
of skilled employees, and lack of management
mixed with sulphide, the opportunity to add
knowledge.4
value and produce nickel sulphate (needed by

138 | Philippine Development Plan 2023-2028

lithium ion battery producers) in the Philippines vis-à-vis Malaysia, Thailand, Vietnam, and
has yet to be taken. Prolonged sanctions on Indonesia.8 However, in order for Philippine
Russian cobalt will likely increase investors’ firms to adopt new technologies to become
interest in the Philippines.7 more competitive, it is critical to expand their
absorptive capacity, which requires developing
Competitive cost of labor, but lack of
the appropriate management skills and
skilled workers. The Philippines industry can
hiring more technical staff. The availability
continue to benefit from the competitive labor
of scientists and engineers in the country,
cost of the country, as the average engineer’s
however, is scored at only 3.8 (out of 7)9.
monthly salary in manufacturing is the lowest

Strategy Framework
To generate more quality jobs and competitive competitiveness of industries and by creating
products, the industry sector will be a dynamic industry ecosystem. A dynamic
revitalized through expanding the domestic industry ecosystem will enable better access
market and supplier base, moving up the of firms, particularly MSMEs, to science,
value chain, and enhancing linkages across technology, and innovation, which are key
sectors (See Figure 6.1). Moving up the value drivers of industrialization.
chain can be achieved by improving the
Figure 6.1 Strategy Framework to Revitalize Industry
TRANSFORM PRODUCTION SECTORS TO GENERATE
MORE QUALITY JOBS AND COMPETITIVE PRODUCTS

REVITALIZE INDUSTRY: SCIENCE, TECHNOLOGY, AND

INNOVATION-DRIVEN INDUSTRIALIZATION

DOMESTIC MARKET PRODUCTION INTER-SECTORAL

AND SUPPLIER BASE EXPANDED MOVING UP THE VALUE CHAIN ACHIEVED
LINKAGES ENHANCED

Enhance business-matching Competitiveness Improved Dynamic Industry Ecosystem Created Link industrial policy with
activities across regions trade and investment policy
Address gaps in industry Bolster science-based
Intensify support to supply chains industries linked to GVC Promote
industries producing for the agglomeration/co-location
domestic market Ensure efficient movement Embrace industry 4.0 for of industry and services
of goods across the technology-mature firms including academic
Provide targeted, regions institutions
time-bound incentives to Upskill and reskill workers
Lower energy costs and to adapt to technology Strengthen
establish labor-intensive
industries and businesses promote renewable energy academe-industry linkages
Enhance the NQI System
sources
Foster regional Adopt international Upgrade industry roadmaps
industrialization Accelerate the standards and international
digitalization and certification Enhance servicification of
Establish common service innovation of MSMEs and industries
facilities startups Develop value-adding
activities and downstream Activate business networks
Update agribusiness Pursue entrepreneurship industries of the mining across industries
leveraging sector
roadmaps
technology-enabled
business models
Undertake industry-specific
R&D and technology Put in place business
adoption continuity plans in all
industries

ENABLING ECONOMIC ENVIRONMENT

Chapter 6 Revitalize Industry | 139

Strategies
Outcome 1: Domestic market production and supplier base
expanded
An integrated industrial policy approach to Map out value chains across sectors.
expand domestic production and supplier Government will facilitate the linking of
base is critical to achieving inclusive and the upstream segments to the downstream
sustainable growth. This entails enhancing segments through capacity development and
business-matching activities across the regions, assistance to meet technical requirements.
intensifying support to industries producing The experience of the Supplier Development
for the domestic market, and providing Program of the DTI and BOI in assessing
targeted and time-bound incentives to establish the presence and capabilities of local parts
labor-intensive industries and businesses. suppliers for automotive, aerospace, and
Enticed by the large domestic consumer base, electronics sectors can provide insights for the
entrepreneurs leveraging technology-enabled effective implementation of this strategy.
business models will be supported. These
strategies will induce the private sector Intensify support to industries
to work with government in establishing producing for the domestic market
common service facilities, in updating and Provide assistance to expand market share.
implementing agribusiness roadmaps, and in Manufacturers producing for the domestic
undertaking industry-specific research and market are faced with competition from
development (R&D) and technology adoption. lower-priced imports that tend to flood
the Philippine market and encroach on
Enhance business-matching activities
domestic market shares. To address this, the
across regions
government hosts provincial and national
Scale up domestic investment promotion trade fairs for domestic manufacturers
and business-matching activities at the local and food processors. Specifically, the One
level. Because of the large coverage of the Town, One Product (OTOP) shows, and Go
Negosyo Centers and the variety of services Lokal! concept stores in major malls provide
they can provide, the Department of Trade marketing assistance to industries that are
and Industry’s (DTI) Negosyo Centers located producing for the domestic market. To be on
all over the country will be the avenues for par with foreign competitors, businesses are
business-matching activities, which would equipped with knowledge, and the right tools
link MSMEs to large enterprises in the regions. to ensure quality and safe production through
The database of Negosyo Centers can also serve the Shared Services Facilities (SSF) program,
as a means for clustering MSMEs to build scale which will be expanded to allow more access
and meet the demands of large enterprises. points particularly for areas outside the
National Capital Region.

140 | Philippine Development Plan 2023-2028

Support affordable production for kits, among others, for the domestic economy.
construction. Small-scale real estate This includes loans for equipment needed
developers should consider efforts that in manufacturing hospital-grade PPEs and
are aimed at consolidating their demand medical supplies. Technical assistance will
for construction materials, especially also be provided to companies to meet the
sustainable construction materials. Such standards of hospitals. Government support
arrangements can help developers overcome will also be provided for the streamlining
the disadvantages posed by the inherent of complex rules and regulations affecting
fragmentation and geographical dispersion of business operations of HLS manufacturers.
housing projects. Furthermore, they benefit
from the resulting reduced transport costs, Agribusiness includes manufacturers of
and suppliers’ wholesale prices. Demand condiments, cacao processing, coffee, mango,
consolidation will continue to be pursued pili, dried fruit, banana, and rubber, among
by the Board of Investment, which has been others. Through the Strategic Investment
active in arranging reverse trade agreements Priority Plan (SIPP), fiscal and non-fiscal
among buyers and sellers in the industry, support will be provided to food processors to
wherein buyers present their needs for certain enable them to compete against imports from
materials, and arrange for preferential pricing neighbors in the Association of Southeast
from interested suppliers. Asian Nations (ASEAN). SSFs for agribusiness
will likewise be expanded and upgraded.
Provide targeted, time-bound
incentives to establish labor-intensive For automotive manufacturing, government
industries and businesses support to programs and measures such as
the Electric Vehicle Incentive Strategy, which
Support for construction and housing will is similar to the Comprehensive Automotive
be sustained through fiscal and non-fiscal Resurgence Strategy program, will be
incentives directed toward housing expanded. These programs help increase the
production confronted with deficits. This domestic market base. In turn, these industries
includes supporting socialized urban, attain economies of scale, realize their export
economic and low-cost housing; developing potentials, and deepen their participation
and implementing information technology in global value chains. Furthermore,
(IT) systems that support general operations incentives to be given must be well-targeted,
from amortization collection and marketing; performance-based, transparent, and
developing globally accepted housing industry time-bound.
standards; and standardizing building
components. Foster regional industrialization

Support for health and life science (HLS) will The government will promote and support
specifically target manufacturing of essential regional and urban centers specializing in
products like personal protective equipment industries where they are most competitive,
(PPE), surgical masks, and medical testing recognizing the value of the industries in the
regions as producers for the local market, and

Chapter 6 Revitalize Industry | 141

addressing regional growth and development were established in Cebu, Davao, Legaspi, and
disparities in the country. These can be done by Cagayan de Oro. More RIICs were added in
upgrading the OTOP, developing knowledge 2021 to 2022 covering Zamboanga, Batangas,
hubs in each region, and developing platforms Tuguegarao, Central Luzon, Iligan, Leyte,
that support an innovative culture. and Cordillera Autonomous Region. These
innovation centers will continue to provide
Upgrade the One Town, One Product. design thinking workshops, and serve as venues
The DTI will partner with the National for networking and engaging with the academe,
Academy of Science and Technology and the industry, and other ecosystem players.
Philippine American Academy of Science and
Engineering to improve further the OTOP. Establish common service facilities
DTI regional offices will work with their
Common service facilities for storage and
respective Regional Development Councils
logistics, such as handling and cold storage
(RDC) to advance the implementation of
services, will be established to help ease the
production-based regional development.
burden of high storage and logistics costs
Develop knowledge hubs in each region. borne by MSMEs. Another service facility that
Through close collaboration among the can be provided to MSMEs is the open-access
Commission on Higher Education (CHED), do-it-yourself maker space called Fablabs,
Department of Science and Technology which will allow MSMEs to explore the use of
(DOST), and DTI, at least one state university digital fabrication. Meanwhile, digital training
or college in each region will be selected to centers will provide support to MSMEs
serve as the knowledge hub in the region. The interested in exploring the use of digital
chosen university will perform R&D work technology. These facilities will be pursued
for enterprises, and train entrepreneurs and together with the private sector, which will
enterprise employees, among others. Within house the facilities and manage access to
the medium term, the state universities and eligible MSMEs.
colleges (SUC) in a specific region will be
Update agribusiness roadmaps
clustered or amalgamated to form a regional
university that will serve as a component of The agribusiness and/or commodity industry
the region’s inclusive innovation centers (IIC). roadmaps will be upgraded to consider
the evolving domestic and international
Develop platforms to support innovative environment. The roadmaps will be aligned
culture. Inclusive innovation centers will be with the updated Philippine commodity
expanded to serve as platforms to promote industry roadmaps released by the Department
an innovation culture, accelerate the of Agriculture (DA), as these pertain to the
commercialization of R&D outputs in the upstream sectors of the food processors and
regions, equip universities to carry out research food manufacturers (See Chapter 5).
relevant to industries, and adopt technology
solutions to create intellectual property. In 2019,
regional inclusive innovation centers (RIICs)

142 | Philippine Development Plan 2023-2028

Undertake industry-specific R&D and value. For the construction companies, R&D
technology adoption solutions include green architecture, additive
manufacturing, and safer local construction
Support will be provided to the industries’
materials which eventually lead to the
R&D needs to enhance technology adoption
expansion and upgrading of construction
and stimulate productivity growth. For
materials suppliers. The Science for Change
instance, the food manufacturing industry
Program (S4CP) of the DOST will be expanded
makes use of R&D solutions to develop
to support the industries in their R&D needs
innovative and environmentally-sustainable
(See Chapter 8).
packing materials, canning techniques, and
identification of ingredients with high nutritive

Outcome 2: Moving up the value chain achieved

Moving up the value chain is a mechanism of the DA and Department of Energy (DOE),
for businesses to increase economic activity, seedling development for high-yield coconuts
become more productive, and provide more and other energy crops will be pursued to
jobs. This can be achieved by improving the increase feedstock. This includes the mapping
competitiveness of businesses, particularly of suitable areas for feedstock production for
MSMEs, and by creating a dynamic industry the biofuels industry.
ecosystem.
Ensure efficient movement of goods
Competitiveness improved across the regions

Address gaps in industry supply chains Improving the logistics, transport, and delivery
services of the country will ensure that the
The implementation of the manufacturing
parts and components manufacturers, and
roadmap will be intensified to address value
raw materials processors located in various
chain gaps in industry. Over the medium term,
regions of the country will be able to supply
the use of sustainable raw materials (along
their products to the next stage of the value
with parts and components) and intermediate
chain at minimal cost. Strategies for improving
products, and the linking of manufacturing
logistics, transport, and delivery services are
with knowledge-intensive services will
discussed in Chapter 7.
be encouraged. Specifically, the DTI, in
coordination with the DOST, will facilitate Lower energy costs and promote
the establishment of supply hubs for raw and renewable energy sources
natural materials in furniture manufacturing.
Meanwhile, the DTI and the Mines and Reducing energy costs will be a vital thrust for
Geosciences Bureau will undertake programs a revitalized industry and expanded frontiers.
to enhance the integration of the iron and steel This will significantly provide support to the
industry with mining, to include increasing other production sectors of the economy, and
the supply of iron ore and coal. On the part tremendously result in positive externalities.
To realize these, the implementing rules and

Chapter 6 Revitalize Industry | 143

regulations of the Renewable Energy Act of companies. To accelerate innovation
2008 will be amended. The DOE, in accordance and digital transformation, the DTI
with existing laws, will provide the legal and will link MSMEs with startups through
regulatory policy environment to ensure the continued implementation of the
that power-generating provinces are given Innovative Start Up Act, particularly
preferential treatment in availing lower power those that could help improve MSMEs’
costs for its constituents, and a continuous 24/7 digital transformation. Tie-ups between
supply of power. Likewise, the amendments MSMEs and large domestic enterprises
to the Electric Power Industry Reform Act and multinationals will be strengthened,
(EPIRA) will be pushed (See Chapter 12). to facilitate the transfer of know-how,
the upgrading of products and processes
Accelerate the digitalization and conforming to international standards
innovation of MSMEs and startups or best practices, and the upscaling of
With more than 95 percent of establishments MSMEs. Similarly, MSMEs and startups
in the Philippines being MSMEs, targeted will be linked for funding and innovation
support to MSMEs will be provided to ensure partnership opportunities.
that they remain competitive as they face the
Intensify support for the digital
challenges of the new normal. The strategies
transformation of MSMEs, and the
that would be adopted to support MSMEs and
growth and development of startups. The
startups include the following.
evolving demand for new and high-quality
Business mentoring, and products and services requires support
entrepreneurship training to help for MSMEs’ adoption of digitalization,
establish more MSMEs. The DTI will technology, and automation, leading
administer enabling programs to help to higher productivity and greater
would-be entrepreneurs establish their innovation. The DTI, in collaboration
businesses. Continuing programs of the with the Department of Information and
DTI such as Negosyo Center Seminars, Communications Technology and private
the SME Roving Academy, and the sector partners, will provide a digital
Kapatid Mentor ME would further help platform for MSMEs and startups.
infuse an entrepreneurial mindset. The
To strengthen digital transformation, the
Negosyo Centers are also venues for
DTI will implement the following strategies
teaching basic entrepreneurship skills,
: (a) craft and implement programs to
such as: the basic rules for spotting market
build the startup ecosystem (with a
opportunities; finding product positioning
common understanding of the startup
and differentiation; product development;
journey and ecosystem development
market development and basic business
among government agencies towards the
finance; and plan preparation.
alignment and harmonization of startup
Link MSMEs with startups and policies and programs); (b) provide
multinational corporations (MNC) or strong focus on promoting innovation

144 | Philippine Development Plan 2023-2028

 and entrepreneurship; (c) create a more protection (See Chapter 10). Furthermore, the
enabling business environment for government will provide a supportive policy
MSMEs startups; and (d) allow more environment for entrepreneurs and startups
foreign participation. through the exploration of various modes
of development finance or blended finance
To address the limited financial resources (See Subchapter 11.1) to encourage business
for the digital transformation of MSMEs,10 activities of targeted beneficiaries, specifically
access to finance will be expanded women, youth, and persons with disabilities.
by improving the credit information,
collateral registry, and insolvency regime. Put in place business continuity plans
Government will improve credit reporting in all industries
systems by enabling the digitalization of
Enterprises can improve competitiveness
MSME data and expanding the movable
by becoming more resilient to risks and
collateral registry (See Subchapter 11.1).
vulnerabilities. The National Wages and
The implementation of a central bank risk
Productivity Commission and other relevant
database will enable de-risking lending
agencies will provide capacity building through
to MSMEs. Strengthening key agencies’
its Productivity Toolbox, which in turn will
capacity for implementation of the
aid in the preparation of business continuity
insolvency regime should also be pursued.
plans and strengthen their entrepreneurial
Conduct extensive innovation pitching capabilities. The government, through
for MSMEs and startups. The DTI, capacity-building and technical assistance, will
through partnerships with industry help equip enterprises with skills to improve
associations, will create opportunities their ability to tap alternative suppliers, and
for MSMEs and startups to convert their beef up inventory capacity to insulate against
ideas into breakthrough innovations. An vulnerabilities.
example of such activity is the open pitching
Dynamic industry ecosystem created
competition for startups in Western
Visayas conducted by the Philippine Bolster science-based industries
Software Industry Association.11 linked to global value chain

Pursue entrepreneurship leveraging The adoption of new technologies is a way to

technology-enabled business models strengthen innovation through the creation
of new products and services in the market,
Entrepreneurs exploring the use of new resulting in more quality jobs, higher incomes,
technology and technology enabled-business emergence of new industries, and promotion
models will require a high degree of of environmental goods. Through science-
regulatory flexibility, market openness, and based industries—industries linked to
a competitive environment. The DTI will science, technology, and innovation—a strong
institutionalize a regulatory sandbox that will domestic base of knowledge production and
provide an environment with sufficient checks technology generation is made available. These
from the government to ensure consumer

Chapter 6 Revitalize Industry | 145

present opportunities for the development of Execute the Harmonized National
new industries and knowledge intensification Research and Development Agenda
of existing industries. They also provide (HNRDA) 2022–2028 with its Industry,
complexity, agglomeration, networking, Energy and Emerging Technologies
clustering, and externalities that eventually roadmaps. 14 The DOST, in partnership
result in industrial negentropy. To bolster with DTI, will hasten the implementation
science-based industries, the following of the HNRDA 2022–2028. The HNRDA
strategies shall be implemented: guides the research program of the
country to ensure that the results of
Intensify the clustering of existing science, technology, and innovation will
knowledge-and-technology intensive support the achievement of national goals.
industries (KTI). The implementation
12
Under the latest HNRDA, the industrial
of the DTI’s Industrialization Plan applications cover additive manufacturing;
2022–2028 will ensure that the public advanced materials; materials for
sector will work together with the existing energy; nanotechnology; optics and
companies and business groups operating photonics; electronics; information and
in high- and medium- knowledge and communications technology; Industry
technology industries. This will strengthen 4.0; quantum technology; construction;
industry clusters that will generate AI; space technology applications;
increased demand for knowledge and transportation; energy and utilities;
technology-intensive applications and unmanned vehicle systems; food; metal
high-skilled labor. & engineering; mining & minerals; and
processing (agro-industrial, natural
Intensify the promotion of the Strategic
products, textiles, and chemical and
Investment Priority Plan. The BOI and
biological manufacturing).
other investment promotion agencies
will continue aggressively promoting the The HNRDA 2022–2028 will also establish
SIPP. The SIPP aims to attract investments avenues for engagement between the
for technology-driven industrial public and private sector toward a strong
production capabilities aimed at structural collaboration in emerging knowledge-
transformation. It serves as a catalyst and technology-intensive industries
and engine for industrial development (EKTI). The DOST and DTI will
and transformation to produce more facilitate public–private collaborations on
diversified, competitive, complex, and EKTIs that have high potential to adopt
sophisticated products. Depending on the research results and commercialized
location, tier,13 and market orientation, applications. These encompass (a) additive
eligible activities of Philippine businesses manufacturing; (b) AI industry; (c)
may qualify for fiscal and non-fiscal sustainable energy industry; (d) advance
measures. materials and precision industry; (e)
smart mining (green metals); (f) advance
aerospace & space technology; (g)

146 | Philippine Development Plan 2023-2028

supply chain provenance (an offshoot creation of ecozones will be within the
of blockchain technology); (h) creative existing investment promotion agencies
industries in manufacturing; (i) advance to maximize investments and promote
agro-manufacturing industry (with focus on industrial dispersion especially outside
food); (j) cyber-physical security industry; metropolitan areas. Further, the ecozones
(k) circular commodity industries (basic will be integrated into the local economy
chemical, basic polymer, basic pesticides, by relaxing the requirements, facilitating
fertilizer, pesticide, manufacturing); and the free flow of parts, components, and
(l) health care manufacturing industry other inputs, and increasing open trade
(with biotechnology). between zone locators and firms outside
the zones.16
Sustain the Science for Change Program.
The DOST, with the science–technology– Implement the priority global value
innovation (STI) ecosystem, will sustain chains (GVC)-oriented industry clusters.
the momentum of the S4CP. The S4CP Given the changes in consumer trends,
has four components, namely: Niche and the acceleration of the adoption of
Centers in the Regions for R&D (NICER) new technologies during the pandemic,
Program, Collaborative R&D to Leverage the DTI, in collaboration with other
Philippine Economy (CRADLE) Program, government agencies, will implement the
Business Innovation through S&T (BIST), following four industry clusters seen as
and R&D Leadership (RDLead) Program. potential sources of growth in the country:
It has created opportunities in advancing (a) Industrial, Manufacturing and
science, technology, and innovation in Transport (IMT); (b) Technology, Media,
the country for capacity building of R&D and Telecommunication (TMT); (c) Health
institutions, and improving industrial and Life Science (HLS); and (d) Modern
competitiveness. Basic Needs (MBN), Resilient Economy.
The first three clusters are currently
Accelerate the implementation of the undergoing global reconfiguration and
ecozone transformation roadmap. The provide an opportunity for the Philippines
Philippine Economic Zone Authority to upgrade, diversify, and reposition its
(PEZA) will expedite the implementation global value chain participation.
of the ecozone transformation roadmap.15
The roadmap expands the different types The IMT cluster’s three subsectors
of Special Economic Zone registrable (aerospace, automotive, and
under PEZA to include new models semiconductors) provide upgrading
incorporating townships, such as the opportunities in the Philippines.
Agro-Forestry Ecozone; Aquamarine Park; An opportunity for the Philippines
Defense Industrial Complex; Halal Hub; lies in upgrading its participation in
Island City Ecozone; and the Knowledge, the electronics, and electrical parts &
Innovation, Science and Technology components GVCs. This is a common
Park (KIST Park), among others. The thread among these three IMT subsectors,

Chapter 6 Revitalize Industry | 147

 by attracting more FDIs in design capacity promoting the domestic suppliers’
to capture more value added, and expand network. In addition, Big Data and
the manufacturing sector. analytical needs associated with health
care represent additional growth
Digitalization of services in the TMT opportunities for the BPO and IT
cluster is also reshaping opportunities outsourcing sectors.
for the Philippines. The key trend for
the business process outsourcing (BPO) Meanwhile, the MBN cluster addresses
sector moving forward is the switch from the need to pursue food security and
cost-saving to value-adding activities. modernize the agricultural and fishing
The next decade will also witness sector. This, along with other goals
the BPO segment as a cross-cutting such as quality education, clean water &
contributor to the competitiveness and sanitation, and affordable & clean energy,
efficiency of other GVCs that they are offers opportunities for new investments
supporting. AI-based cloud analytics to support the country’s economic
and enterprise resource planning will recovery and long-term sustainable and
continue to expand, along with the inclusive growth.
normalization of the work from home
arrangement. The 82 percent share of Embrace Industry 4.0 for technology-
Philippine BPOs and shared services mature firms
centers in the global market will be Industry 4.0 has been creating new industries
leveraged by targeted policies to increase and disrupting business models at an
the country’s participation in the TMT accelerated pace. New technologies arising
GVC cluster. from industry 4.0 will spur the development
of new production techniques and business
With a health crisis at the root of the
models that will transform global production
current global economic distress,
systems, create new and more distributed
the HLS cluster plays a strategic
supply chains, and trigger selective reshoring
role in opening income-generating
and nearshoring, thus requiring new skills
opportunities for the country. The
and capabilities at each GVC stage. The
development of the IMT and TMT
DTI’s strategies to take advantage of these
clusters will facilitate the emergence
new technologies to support the innovation
of an HLS cluster in the Philippines.
capacity and competitiveness of Philippine
Specifically, the IMT cluster (through
businesses include the following:
electronics parts and components) will
develop further the medical device Implement Industry 4.0 roadmaps. The
sector, while the TMT cluster (through DTI and DOST have formulated Fourth
the health care IT services) will advance Industrial Revolution (4IR or Industry
the health care service sector. Moreover, 4.0) roadmaps, outlining overall strategies
the pharmaceutical sector will attract for the necessary facilities and services,
leading multinational companies while human resources, R&D technologies,

148 | Philippine Development Plan 2023-2028

and science and technology policies. One will support firms and industries that are
example of such 4IR roadmaps that could shifting to new technologies by providing
be implemented is the AI Roadmap. It deeper awareness and understanding of
provides for the establishment of the digital transformation, assisting firms in
Center for AI R&D. AI adaption will enable their technology readiness assessment and
the country to tap vast opportunities to guiding firms in crafting their firm-level
help maintain the regional and global Industry 4.0 roadmaps.
competitiveness of industries, prepare the
future workforce for the jobs of the future, Provide soft loans or technical assistance.
and attract AI R&D of multinational Support measures like soft loans, subsidies,
and big tech companies to locate in the and technical assistance programs will
Philippines. The Center is envisioned to help firms increase their resilience,
be a public–private partnership to serve enabling them to become more adaptive
as a hub for data scientists and researchers to production shocks or supply systems
in performing collaborative AI R&D, changes through the adoption of advanced
provide consultancy services, create AI technology and automated processes.
tech products, and conduct data literacy
Create the Industry 4.0 Sandbox. The
programs. The Center will focus on
Industry 4.0 Sandbox will be equipped
key areas utilizing AI such as precision
with advanced manufacturing modules
farming, smart manufacturing, healthcare
and technology for R&D and prototyping
services, AI-powered BPO, smart cities,
activities. Through the Industry 4.0
and resilient technology.
sandbox, Philippine manufacturers will
Build Industry 4.0 facilities. An Industry be able to experiment with Industry 4.0
4.0 pilot factory will serve as a platform solutions in settings that mimic a fully
for a collaborative learning environment supported production environment
to teach and demonstrate Industry 4.0 without restrictions nor interruptions to
management and production technologies daily operations.
like advanced robotics, automation, IoT,
Upskill and reskill workers to adapt to
and smart manufacturing, especially for
technology
large enterprises, MSMEs, researchers,
and universities. DTI is also working While many jobs will be lost as a result of
with DOST in establishing Industry automation and advancements in digital
4.0 facilities, including the Advanced technology, new jobs will also emerge that will
Manufacturing Center ; and the Advanced increase workers’ productivity. Tapping these
Mechatronics, Robotics, and Industrial benefits will require increasing investments
Automation Laboratory. in skills development, along with greater
efforts by companies to upskill or reskill
Assist firms in implementing digital their workforce to perform new and higher
readiness. Through the Smart Industry order roles complementary with machines.
Readiness Index17 project, the government Current systems of learning and job fitness do

Chapter 6 Revitalize Industry | 149

not provide the agility that lifelong learners Adopt international standards and
will require; hence, the need to shift to a international certification
skills-based system that can provide more
Information campaigns targeting MSMEs
efficient mechanisms. The academe–industry
will be launched to promote the benefits of
collaboration will also serve as a main avenue
accreditation and conformance to international
to improve skills development (See Chapter 4
standards. Specific attention will be given to
for a more detailed discussion on reskilling).
essential sectors such as health care and food
Enhance the National Quality processing, which will support the economy
Infrastructure System during times of crises.

There is a need to address the fragmented nature Develop value-adding activities and
of the country’s National Quality Infrastructure downstream industries of the mining
system, which limits the capacity of local sector
manufacturers to comply with global technical
The mineral resources of the country will be
regulations and standards. To address this, the
primarily used for industrial value-addition.
passage of the NQI law will be pursued. The
In particular, mineral ores are highly preferred
law is expected to harmonize the country’s
to be processed domestically for downstream
standards, technical regulations, metrology,
industries (See Chapter 15).
accreditation and conformity assessment
procedures, packaging, and labeling to be at
par with international standards.

Outcome 3: Inter-sectoral linkages enhanced

Revitalizing industry through science, Free Trade Agreements (FTA) and
technology, and innovation industrialization arrangements to create the enabling
will require enhancement of several linkages environment for facilitating investments
across sectors . Industries need to increase their from target-source countries, like the United
linkages with agriculture and services sectors. States and South Korea, in terms of capital
Manufacturers need to expand domestic and technology. The Regional Comprehensive
linkages while exploring further participation Economic Partnership (RCEP) Agreement
in the global value chains. The link between and the Philippines–South Korea FTA are
trade and industrial policy will also be trade agreements that will be signed and fully
strengthened. Finally, the policy implementers implemented. These will provide an overall
need to work together to ensure a business framework for the entry of investors in areas
environment that revitalizes industry. such as electric vehicles, pharmaceuticals,
electronics, and agro-processing.
Link industrial policy with trade and
investment policy The Philippine government will also actively
Trade strategies that support industrial participate in the negotiations with the
development include pursuing high-impact innovation- and technology-rich countries

150 | Philippine Development Plan 2023-2028

that will complement STI-driven strategy and, Relatedly, to position the Philippines as a
in parallel, aggressively attract investments hub for knowledge and technology-intensive
from global companies in the TMT, IMT, export industries, the Philippines will
and HLS clusters. Of particular interest are participate in negotiations to come up with
the semiconductor manufacturers who are relevant disciplines on the digital economy
currently diversifying production locations. and e-commerce.

Box 6.1. Cluster-based Approach to Industrialization

The Philippines’ post-COVID-19 recovery could benefit from the reconfiguration of its leading export
sectors in four clusters. These are: Industrial, Manufacturing and Transport (IMT); Technology, Media, and
Telecommunication (TMT); Health and Life Science (HLS), and Modern Basic Needs, Resilient Economy
(MBN).
The IMT cluster provides the country with upgrading opportunities in aerospace, automotive, and
semiconductors. The cluster covers the following: aerospace and maintenance, repair, and overhaul (MRO)
including flight control actuation systems, servo actuators, servo valves, galley inserts, structures and equipment,
seat parts, lavatories, interior fit-out, panel assembly, electronics, airframes and sub-assemblies, and MRO base
and line maintenance, automotive including auto electronics, advanced driver assistance systems (ADAS)
components, engineering services outsourcing, electric motor powertrains like battery, public utility vehicles,
electric vehicles (EV) and EV parts, green metals value-adding and processing, semiconductor manufacturing
services including wafer fabrication, integrated circuit design, R&D, and electronic manufacturing.
The TMT cluster will provide the Philippines opportunities from the digitalization of services (See Chapter 7 for
more details on the strategies related to services). The TMT cluster covers the following: IT-BPM, hyperscaler data
centers, creative industries, trans-shipment facility operations for global logistics, regional telecommunication
infrastructure services, and digital economy; and new products, activities, or solutions using digital technologies
like artificial intelligence, robotics, augmented reality, virtual reality, mixed reality, 5G connectivity, and Internet
of Things in the following areas:
• Smart technology: applications in buildings, homes, factories, agriculture, cities, interconnected
products and services, voice assistants embedded in TV sets, cars, home appliances, smart home
devices, and home robots
• Resilient technology: disaster preparedness/mitigation, cyber security, and renewable energy
• Vehicle technology: self-driving cars, multimodal transportation, and EV
• Audio, video, and education technology
• E-gaming: console and personal computer gaming software, mobile gaming, immersive audio and
advanced communication capabilities, cloud gaming platforms, and gaming accessories
• Metaverse: applications for gaming, entertainment, education, and marketing, among others
In the HLS cluster, the goal is to make the Philippines self-sufficient in pharmaceuticals (with companies like
Lloyd Laboratories aiming to make the Philippines self-sufficient in pharmaceuticals), medical devices, healthcare
services, digital health products and services such as personal health wellness technology products, therapeutic
systems addressing chronic diseases, telemedicine solutions, and artificial intelligence (AI)-assisted diagnoses.
The HLS cluster covers the following: life sciences and biotechnology sector, vaccines, pharmaceuticals, medical
devices, healthcare services, digital health products and services such as personal health wellness technology
products, smart watches, lighter health wearables, more precise sensors, therapeutic systems addressing chronic
diseases, telemedicine solutions, and AI-assisted diagnoses.

The MBN cluster refers to modern basic needs, such as food, shelter, infrastructure, and education, along with
activities that foster economic resilience. The cluster covers the following activities and sectors: food security,
agro-industrial including coffee, cacao, coconut, fruits and nuts, tropical fibers, rubber and other high-value
crops, fishing, blue economy, processed minerals, infrastructure, education, shelter, sanitation, textile, chemicals
and plastics, and sectors that foster economic resilience such as energy efficiency, renewable energy, and goods
that improve the quality of life while minimizing the use of resources and inputs.

Chapter 6 Revitalize Industry | 151

Promote agglomeration or co-location needed to achieve these. However, the rapid
of industry and services, including development in technology, the geopolitical
academic institutions uncertainties, and the challenges brought
about by climate change require a reassessment
The skills and jobs needed by industries will
of these roadmaps. Thus, the updating of
be matched to those offered by the academic
industry roadmaps, with focus on innovation
institutions by putting together in one
measures, and skills & competencies critical to
location the industry, services, and academic
the industries for 4IR technology adoption and
institutions. Specific services such as R&D,
sustainable manufacturing, will be undertaken
business support, marketing, and financial
by DTI and DOST. One example of the roadmap
services will be made available to support the
that can be updated is the pharmaceutical
operation of industries in the area. The KIST
roadmap, which can be elevated into an HLS
parks being implemented by PEZA will be
roadmap by: (a) incorporating plans for the
expanded to pursue this strategy.
institution of a knowledge center of excellence
Strengthen academe–industry linkages in collaboration with HEIs; (b) mapping the
innovation ecosystem available to the cluster;
The experience of the University of the and (c) enabling a superior environment
Philippines (UP) as an innovator and incubator afforded by, for example, a dedicated
of health devices and other innovations used by technology park or campus and venture capital
the UP Manila–Philippine General Hospital, provision.
especially during the onset of the COVID-19
pandemic, is evidence that in some areas our Enhance servicification of industries
country has the capacity to answer domestic
As servicification is a business decision
needs without having to rely on imports.
and a response by manufacturers to market
The innovation was made possible by the UP
conditions, government will further
Surgical Innovation and Biotechnology. The
strengthen the inter-industry demand
DTI and DOST will tap other SUCs and HEIs to
between industry and service sectors to
host several programs, activities, and projects
encourage more servicification. Developing
that help accelerate scientific advancements
product standards, protecting consumer
and technological developments in the form
preferences, reducing regulatory demands or
of technical services, industry assistance,
requirements, enhancing export orientation &
collaborative research, and product design
GVC participation, and utilizing government
and development. These will be made possible
procurement are examples of demand-side
through the help of industry partners, the
strategies, which the government can
government, and other funding agencies.
implement. The implementation of the SIPP
Upgrade industry roadmaps provided under the Corporate Recovery and
Tax Incentives for Enterprises Act will provide
The DTI and DOST have produced industry targeted and time-bound fiscal incentives to
roadmaps that outline the vision and targets activities that will enhance manufacturers’
for the industry and the necessary support in-house servicification. These include R&D

152 | Philippine Development Plan 2023-2028

and engineering services that will lead to services subsectors, encompassing wholesale
better manufacturing processes, resulting in trade, telecommunications, information and
higher labor productivity. Productivity will communication technology, real estate, and
also be improved even without adopting new professional and technical services.
technologies, by simply tweaking existing
steps and removing unnecessary ones. Activate business networks across
Services providing expertise on organizational industries
paradigms, such as lean manufacturing, could A more active interface and collaboration
contribute to this endeavor. In addition, with the industry ecosystem will be
EKTIs will increase the interface of industry established among these business networks.
and services sectors due to the inherent Manufacturing industry associations and
synergistic processes between the two sectors. cross-industry linkages will be strengthened
For instance, under advance materials and and activated toward solving coordination
precision, a number of Submanufacturing problems to promote backward and forward
industries, such as petroleum manufacturing, linkages and economies of scale as well as
chemical manufacturing, and metal facilitate information and resources sharing.
manufacturing, are strongly linked to the

Legislative Agenda
Table 6.1 presents the priority bills of the 19th Congress to revitalize industry:
Table 6.1 Legislative Agenda to Revitalize Industry

RESPONSIBLE
LEGISLATIVE AGENDA RATIONALE/KEY FEATURES
AGENCY
Ratification of the Regional The RCEP negotiations were launched in November 2012 and concluded eight years after, in Department
Comprehensive Economic November 2020, at the height of the coronavirus disease (COVID-19) pandemic. RCEP is a free trade of Trade and
Partnership (RCEP) agreement between 15 countries comprising the ASEAN-10 and Australia, China, Japan, South Korea, Industry (DTI)
and New Zealand. Joining the RCEP can significantly enhance the market access of the Philippines.

National Quality Infrastructure The bill intends to establish standardization, metrology, accreditation, and conformity assessment DTI, Department
services necessary to provide acceptable evidence that products and services meet defined of Science and
requirements, demanded either by authorities or the marketplace. Moreover, it seeks to hasten Technology (DOST)
regulatory approvals for the release and sale of goods and services into the markets, and ascertain
protection of consumers from trade malpractices and substandard or hazardous products.

Amendment of the Philippine The Philippine Qualifications Framework will be updated to incorporate the Philippine Skills DTI
Qualifications Framework Framework and will serve as a common reference that employers and workers share to ensure the
(Republic Act 10968) match between jobs and skills.

Amendments to the Philippine This entails updating of the 27-year-old PEZA law to adopt to the digitalization of the locators. PEZA
Economic Zone Authority
(PEZA) law

Philippine Standardization Act The proposed bill envisions to update RAt 4109, which was enacted in 1964. DTI
of 2022

Internet Transactions Act The bill seeks to establish an effective regulatory policy for commercial activities conducted through DTI
the internet or electronic means.

Enterprise Productivity Act This aims to strengthen the productivity improvement and gainsharing between workers and DTI
enterprises.

Science and Technology Parks This proposes the establishment of science and technology parks nationwide to largely promote DOST
Act the culture of competitiveness and innovation through the active promotion of investments from
tech-based enterprises and knowledge-based institutions.

Chapter 6 Revitalize Industry | 153

Results Matrix
Table 6.2 presents the indicators and targets under the Plan period to revitalize industry.
Table 6.2 Results Matrix: Revitalize Industry
TARGETS RESPONSIBLE
BASELINE MEANS OF AGENCY/
INDICATOR
(YEAR) 2023 2024 2025 2026 2027 2028 EOP VERIFICATION INTER-AGENCY
BODY
Outcome 1: Domestic Market Production and Supplier Base Expanded

Gross value-added 6.5 7.0–8.0 8.0–9.0 9.0–10.0 10.0–11.0 11.0–12.0 11.0–12.0 11.0–12.0 National Income Department
(GVA) growth of (Q1–Q3 2022) Accounts (NIA) of Trade and
modern basic needs Industry (DTI),
(MBN) sectors Philippine
increased (%)a Statistics
Authority (PSA)

GVA growth of 15.8 16.0–17.0 16.0–17.0 16.0–17.0 16.0–17.0 17.0–18.0 17.0–18.0 17.0–18.0 NIA DTI, PSA
construction (Q1–Q3 2022)
increased (%)

Outcome 2: Moving Up the Value Chain Achieved

Competitiveness improved

Ranking in IMD World 39th of 63 37 36 34 33 31 30 30 IMD DTI

Competitiveness (2022)
survey improved
(Business efficiency
Pillar)

Firms offering formal 59.8 62 64 67 70 72 75 75 Global Innovation DTI, Department

training relative to (2022) Index of Science and
the total number of Technology
firms increased (%)b (DOST), Technical
Education
and Skills
Development
Authority

Share of medium 0.41 0.42 0.44 0.45 0.47 0.48 0.50 0.50 Updating of DTI, PSA
enterprises to (2021) the List of
total number of Establishments
micro, small, and
medium enterprises
increased (%)

Dynamic industry ecosystem created

Number of scientists, 24,887 30,728 32,051 33,432 34,872 36,374 37,940 37,940 R&D Statistics DOST, PSA
engineers, and (2018)
technicians employed
in businesses
increased (head
count)c

Labor productivity in 0.498 0.72– 0.73– 0.75– 0.76– 0.78– 0.80– 0.80– NIA, Labor Force DTI, PSA
industry increased (Q1–Q3 2022) 0.73 0.75 0.77 0.79 0.81 0.83 0.83 Survey
(2018=100; PHP
million/employed)

Labor productivity 1.029 1.048 1.072 1.096 1.120 1.144 1.169 1.169 NIA, LFS DTI, PSA
in manufacturing (Q1–Q3 2022)
increased (2018=100 ;
PHP Mn/Employed)d

154 | Philippine Development Plan 2023-2028

 TARGETS RESPONSIBLE
BASELINE MEANS OF AGENCY/
INDICATOR
(YEAR) 2023 2024 2025 2026 2027 2028 EOP VERIFICATION INTER-AGENCY
BODY
Employment 446 500–600 530–630 560–660 590–690 620–720 650–750 3,450– LFS DTI, PSA
generated in industry (Q1–Q3 2022) 4,050
increased (‘000)e

A. Employment 231 300-360 318-378 336-396 354-414 372-432 390-450 2,070- LFS DTI, PSA
generated in (Q1–Q3 2022) 2,430
manufacturing
increased (‘000)e

B. Employment 184 185-198 194-208 204-218 213-228 222-238 231-248 1,215- LFS DTI, PSA
generated in (Q1-Q3 2022) 1,300
construction
increased (‘000)

GVA growth rate of 2.65 2.9-3.2 3.4-3.8 4.1-4.6 5.0-5.5 6.0-6.7 7.2-8.0 7.2-8.0 NIA DTI, PSA
High knowledge-and- (Q1-Q3 2022)
technology intensive
industries (KTI)
increased (%)f

GVA growth rate 11.52 10.6-11.8 10.8-12.0 11.0-12.2 11.2-12.5 11.5-12.7 11.7-13.0 11.7-13.0 NIA DTI, PSA
of Medium KTI (Q1-Q3 2022)
increased (%)g

Digital transformation 5.73 5.82 5.91 6.01 6.10 6.20 6.30 6.30 IMD World DTI, Department
in companies (2022) Competitiveness of Information
improved (Score survey and
0–10)h Communications
Technology
(DICT), DOST

GVA growth rate 7.5 8.0-9.5 8.0-9.5 8.0-9.5 8.0-9.5 8.0-9.5 8.0-9.5 8.0-9.5 NIA DTI, PSA
of industry sector (Q1-Q3 2022)
sustained (%)i

GVA growth rate 5.3 8.0-9.5 8.0-9.5 8.0-9.5 8.0-9.5 8.0-9.5 8.0-9.5 8.0-9.5 NIA DTI, PSA
of manufacturing (Q1-Q3 2022)
sector increased (%)i

Percent of firms with 30.7 35.0 50.0 50.0 SIA DTI, DOST,
product innovation (2015) Philippine
increased (%)j Institute for
Development
Studies (PIDS)

Percent of firms that 42.9 48.0 51.0 51.0 SIA DTI, PIDS, DOST
are innovation active (2015)
increased (%)j

Share of high-tech 63 65.56 68.22 70.99 73.88 76.88 80.0 World Trade DTI
exports to total (2020) 80.0 Organization
exports increased (%)

Firms adoption of Non-core: 24.0 26.0 28.0 28.0 DTI, DICT, DOST,
e-commerce via the 17.7 SICT PSA
internet increased Core: 22.2
(%)k (2017)

Regional inclusive 11 ≥1/ ≥17 DTI DTI

innovation centers (2022) Region
established

Chapter 6 Revitalize Industry | 155

 TARGETS RESPONSIBLE
BASELINE MEANS OF AGENCY/
INDICATOR
(YEAR) 2023 2024 2025 2026 2027 2028 EOP VERIFICATION INTER-AGENCY
BODY
Outcome 3: Inter-sectoral Linkages Enhanced

Number of 6-digit 2,915 3,073 3,239 3,415 3,600 3,795 4,000 4,000 Foreign Trade DTI, PSA
exported products Statistics
increasedl (2021)

Number of 5 ≥1 ≥1 ≥1 ≥1 ≥1 ≥1 ≥1 Philippine PEZA

knowledge, Economic Zone
innovation, science, (2022) Authority (PEZA)
and technology annual report
parks established
a
This includes manufacture of food products, manufacture of beverages, manufacture of textiles, manufacture of wearing apparel, manufacture of leather and related products, including
footwear, manufacture of wood, bamboo, cane, rattan articles and related products, manufacture of chemical and chemical products, manufacture of furniture.
b
Obtained from the Global Innovation Index. The term includes scientists and engineers.
c
Obtained from DOST Compendium of R&D Statistics. Per Philippine Statistics Authority, the term “Scientist” is generally synonymous with the definition of the term “Researcher” as defined
in the Frascati Manual.
d
Targets obtained by straight line forecast using 2010–2019 data.
e
Employment generated refers to the additional employment from the preceding year. Data obtained from the Labor Force Survey. The DTI targets an employment generation between
3.45–4.05 million for the industry sector by the end of Plan period. Similarly, the employment generation for manufacturing by the end-of-plan period is between 2.07 and 2.43 million.
f
Includes the GVA for manufacture of basic pharmaceutical products and pharmaceutical preparations, manufacture of computer, electronic and optical products, and manufacture of
transport equipment.
g
Includes the GVA for manufacture of chemical and chemical products, manufacture of electrical equipment, manufacture of machinery and equipment except electrical.
h
Based on the IMD World Competitiveness Executive Opinion Survey; targets are based on the scores of the best performer in the ASEAN.
i
Industry and manufacturing growth rates based on DBCC projections.
j
Based on the PIDS Survey of Innovation Activities, 2015.
k
Based on the Survey of Information and Communication Technology, 2017.
l
Sourced from the International Trade Center Trademap.

156 | Philippine Development Plan 2023-2028

1
Google, Temasek, and Bain and Company. 2021. E-conomy SEA 2021 Roaring 20s: The SEA Digital Decade. https://services.google.com/fh/files/misc/e_conomy_
sea_2021_report.pdf.
2
Aldaba, R. 2022. Philippine Industrialization: Recovery and Growth Toward Shared Prosperity, Sustainable and Inclusive Economic Development. Paper
presented at the UPSEAA Forum. October 07, 2022. Zoom meeting.
3
The First Industrial Revolution was driven by the introduction of steam power, which enabled steam-powered mechanization of weaving processes overtaking
the use of traditional looms. The Second Industrial Revolution is characterized by the conveyor system transporting automobiles to fixed workstations. The Third
Industrial Revolution enabled the automation of industrial processes using electronics and computers. Finally, the Fourth Industrial Revolution is driven by tools
such as the Internet of Things, artificial intelligence, cloud computing, and digital platforms.
4
Aldaba, R. 2022. Philippine Industrialization: Recovery and Growth Toward Shared Prosperity, Sustainable and Inclusive Economic Development. Paper
presented at the UPSEAA Forum. October 07, 2022. Zoom meeting.
5
BusinessWorld Online. 2022. Electronics Sector Sets 10% Growth Target for 2022. https://www.bworldonline.com/top-stories/2022/01/28/426426/electronics-
sector-sets-10-growth-target-for-2022/.
6
October 2022 PMI figures for China (49.2), South Korea (48.2), Taiwan (41.5), and the Euro Area (46.4) have fallen below 50.0 signaling a contraction of
manufacturing activity while the United States and Japan have PMIs that are dangerously close to a contraction at 50.4 and 50.7, respectively.
7
Arenas, G. and S. Coulibaly. 2022. A New Dawn for Global Value Chain Participation in the Philippines. International Development in Focus. Washington, DC:
World Bank. doi:10.1596/978-1-4648-1848-6.
8
Based on a JETRO survey as cited by World Bank. 2020. “Next Administration: A Reform Agenda for Manufacturing Development.” Washington, DC.
9
World Economic Forum. 2018. Readiness for the Future of Production Report 2018. https://www.weforum.org/reports/readiness-for-the-future-of-production-
report-2018/?DAG=3&gclid=CjwKCAiAnZCdBhBmEiwA8nDQxRpXRXLdZ8LOoErGGQx9q83bW3nONDsSuBkUFFDsXBYd4s-VeZ8nOxoCn4kQAvD_BwE.
10
Particular attention should also be given to improving access to finance of women-led MSMEs.
11
Department of Trade and Industry (DTI). 2021. MSMEs Urged to Embrace Digitalization, Innovation. URL here.
12
Following the latest nomenclature of the OECD (Indicators 2020) across economies, high R&D-intensive industries include aircraft, computer, electronics, and
optical products, pharmaceutical, and publishing including software. Medium R&D-intensive industries include chemicals (excluding pharmaceuticals), electric
equipment, other machinery & equipment, and transportation equipment.
13
Tier 1 applies to job and value creation activities, value chain upgrading, and support sectors critical to industrial development. Tier 2 applies to activities critical
to industrial development and import-substituting activities. Tier 3 applies to R&D and breakthroughs in science; health; and generation of new knowledge & IP,
commercialization, and highly technical manufacturing.
14
Department of Science and Technology. 2022. Harmonized National Research and Development Agenda 2022–2028. https://www.dost.gov.ph/
phocadownload/Downloads/Resources/Quick_Links/HNRDA_2022-2028.pdf.
15
Philippine Economic Zone Authority. 2022. Excellence and Innovation in Investment Promotion PEZA’s Milestones at 27. https://www.peza.gov.ph/press-
releases/excellence-and-innovation-investment-promotion-peza%E2%80%99s-milestones-27.
16
Aldaba, R. and A.D. Quejada. 2022. ”FDI Spillover Effects: Evidence in the Philippines.“ ERIA Discussion Paper Series No. 437.
17
The Smart Industry Readiness Index, developed by the Singapore Economic Development Board, is a suite of frameworks and tools designed to help
manufacturers start, scale, and sustain their manufacturing transformation journeys. It covers three major blocks: process, technology, and organization, each of
which are comprised of pillars and dimensions to be evaluated to generate a holistic Industry 4.0-readiness assessment.

Chapter 6 Revitalize Industry | 157

158 | Philippine Development Plan 2023-2028