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
ASEAN Economic Community
& PH Manufacturing

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Distributed Manufacturing

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Source: Asian International Economists Network, ADB
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
 ASEAN at a Glance
(2012)
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
Source of data: World Economic Outlook April 2013 Database, International

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Monetary Fund; TradeMap, International Trade Center
 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 2010 EIF 2007

MS 625M MS 647M
ES US$ 4.0T ES US$ 3.5T
TT US$ 79B TT US$ 131B

EIF 2010 EIF 2008

MS 1.81B MS 726 M
ES US$ 4.3T ES US$ 8.3T
TT US$ 76B TT US$ 262B

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 PH Top Markets, 2012
Non-FTA Partners
FTA Partners

Source: NSO

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 Trade in Goods
“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% Percent of Total No. of
Tariff Lines at ATIGA 0% - 5%
Brunei 99.03%
Darussalam
Cambodia 98.53%
Indonesia 98.66%
Lao PDR 95.18%
Malaysia 98.68% Myanmar 99.28%
Philippines 98.63% Vietnam 99.68%

Singapore 100% *Based on:

1. AFTA-CEPT Packages from the ASEAN Secretariat
website
Thailand 99.84% 2. Okabe, M. and S. Urata (2012), The Impact of Trade
Liberalization in ASEAN on Intra-ASEAN Trade flows
(mimeo)

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 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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PH Trade deficit with ASEAN
In US$ Million
2012 2011 2010 2009 2008
PH Trade Deficit with
(4,307) (5,601) (3,947) (5,124) (7,543)
ASEAN
- 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 & (554) (2,105) 1,808 (1,638) (2,291)
automotives
Source: NSO (processed by
BITR)
PH Trade with ASEAN (2012)
Top 10 Imports from ASEAN Top 10 Exports to ASEAN
% %
Product Group Product Group
Share Share
1 Electrical, electronic equipment 20.0 1 Electrical, electronic equipment 59.5
2 Mineral fuels, oils, distillation 14.8 2 Machinery, nuclear reactors, boilers 8.4
products 3 Vehicles other than railway, tramway 5.1
3 Machinery, nuclear reactors, boilers 11.4
4 Mineral fuels, oils, distillation 3.0
4 Vehicles other than railway, tramway 8.9 products
5 Plastics and articles thereof 5.7 5 Optical, photo, technical, medical 2.7
apparatus
6 Copper and articles thereof 2.1
6 Miscellaneous edible preparations 3.0
7 Tobacco and manufactured tobacco 1.8
7 Animal, vegetable fats and oils, 2.5
substitutes
cleavage products
8 Cereal, flour, starch, milk 1.3
8 Cereals 2.1
preparations and products
9 Rubber and articles thereof 1.2
9 Essential oils, perfumes, cosmetics, 1.9
toiletries
10 Fertilizers 1.2
10 Optical, photo, technical, medical, 1.9
etc apparatus

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Source: ITC Trademap, August 2013
PH Trade with ASEAN
• 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

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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.
Manufacturing Resurgence

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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

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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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Critical and In-demand Skills /
Training requirements
Sectors Type
Auto parts, Tool & Design, tool making, prototyping,
Die molding, die & casting
Chemical, Rubber, Chemical engineering, Materials
Plastics 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) 23
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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