Keep costs down, make unique products

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Friday, June 6, 2014


THE Philippines needs to do “impactful” things if it wants to be competitive in an integrated economy, Department of Trade and Industry (DTI) Undersecretary Nora Terrado has said.

In her keynote speech at the ICT-BPM Conference last Monday, Terrado said improving the country’s competitiveness is what is most important in facing the challenges of integration.

While the country has moved up to 59th place in the World Economic Forum’s Global Competitiveness Index, she said there are some areas where the country needs to step up. These are in labor market efficiency, technological readiness, infrastructure and innovation.

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It scores high in its macroeconomic environment, market size, business sophistication, health and primary education. “We are improving, moving in the right direction,” she assured.

In terms of labor market efficiency, Terrado the country is seeing good cooperation between labor and employers and shows good results in the effects of taxation and incentives. It is in the redundancy cost, flexibility of wage determination and women in labor force ratio to men that it scores weakly.

While Terrado noted that Singapore scores well in all indicators, placing first in labor market efficiency and second in overall competitiveness, she pointed out that they only have a population of 5.2 million. The Philippines placed 100th out of 148 economies in terms of labor market efficiency, but its population is 98 million.

In terms of labor migration, Terrado said it has been happening for many years and that the Asean Economic Community will not change it. “It is the nature of a global economy, not just Asean 2015,” she said.

Although most businesses fear the loss of their professional workers to other opportunities around Southeast Asia, Terrado assured that domestic rules and restrictions still apply, which means working in other Asean territories will not be as easy to do without the right requirements.

For her, thriving in an integrated economy means making sure the cost of labor and natural resources are low while the processes and products made are unique.

Collaboration is key to being competitive. She also pins her hopes on people development, innovation, regulatory reforms and a change in mindset. She urged Filipinos to be positive and to get in the spirit of things to promote the Philippines to the rest of the world.

Published in the Sun.Star Cebu newspaper on June 07, 2014.

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