The AER Industrial Policy Program led by the AER Industrial Policy Team (AER IP Team) aims to contribute to the development of a policy agenda to address weaknesses in the country’s industrial outcomes. The objective of this initiative is to present an accurate and comprehensive picture of the state of industry and employment in the country, and what this means for people’s lives and future challenges. The AER IP Team believes that an industrial policy will play a crucial role in facilitating the upgrading and transformation of more productive sectors, in the process creating better quality jobs for Filipinos presently excluded from the narrow base of the country’s economic growth.
Through basic research and analysis, roundtable discussions and key informant interviews, the AER IP Team seeks to test specific ideas on industrial policy and gauge various groups’ openness to them. Overall, the team believes that a constituency for industrial policy can be developed, particularly within the labor sector and segments of industry that see broader and more integrated economic sectors as a means for industrial deepening and commercial growth. At the same time, the team seeks to constructively engage the Government’s Manufacturing Roadmap process, and sees the need to cultivate relations, exchange perspectives, and find common ground with the sections of government that may be open to Industrial Policy.
1. Framework Paper
The AER IP Team Framework Paper provides a basic structural analysis of the country’s economy, and traces past policies and their outcomes. It argues that the Philippines needs to reintroduce an industrial policy to realize the vision of sustainable economic prosperity and industrialization with social justice. The paper also introduces a checklist of considerations for the adoption of industrial policy in the country. Click to download IP Team Framework Paper, An Industrial Policy for the Philippines: Correcting Three Decades of Error. (hyperlink o the title, upload uneditable pdf version)
2. The Quality of Growth
While the framework paper already establishes the historical problems with Philippine growth performance and structure, the Team sees the need to analyse in detail how the more recent growth performance may be different. This policy work involves assessing the strengths and weakness of recent growth, and the PNoy programs for growth, and what they imply for the imperative for Industrial Policy. The research-writing on this is led by Joseph Lim and Cristina Morales Alikpala.
3. Inclusive Growth and the Question of Employment
The government’s Manufacturing Roadmap project led by DTI represents at least a section of government expressing greater openness to Industrial Policy and some realization of the limitations of Philippine economic performance. The AER Policy Team welcomes this development, as it means renewed industry studies and an attempt for more serious business sector coordination, with the view of reviving manufacture. There are clear limitations, however. For one, the roadmap framework is blind to the policy errors of the past, affecting current and future policy preferences. One way to assess the effectiveness of the Roadmaps is to check their impacts on job generation and the quality of employment. Rene Ofreneo leads this research.
4. Institutional foundation: planning and implementation infrastructure
The capacity and practices of planning institutions are crucial factors in a country’s ability to engage in Industrial Policy. There is, therefore, a need to reexamine the institutional infrastructure for planning and program implementation in the country. By doing so, critical gaps and the potentials for leaderhsip will be identified. Victoria-Viterbo Quimbo leads this initiative.
5. Electricity Sector
One of the most crucial factors affecting the different industries in the country would be electricity. Three major problems afflict the electricity sector today. First, the stranded debt and contract losses of the Power Sector Assets and Liabilities Management Corporation (PSALM) continue to balloo, despite having sold most of its assets. Second, the Philippine electricity rates is one of the highest in the region. Third, there is a serious hreat to the security of electricity supply in the near and long term. Nepo Malaluan spearheads the study looking at the root causes of these problems, and exploring ways to address them.