ASEAN 2015: Implications on Philippine Human Resource ...tesda.gov.ph/uploads/File/TECH VOC CONGRESS/08... · ASEAN 2015: Implications on Philippine Human Resource Development Undersecretary

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)

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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

29

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