Isang mapagpala at mapagpalayang araw sa inyong lahat!
Binabati ko si Secretary Ramon Lopez, ang mga opisyal ng DTI at mga kasaping ahensya at organisasyon nito. Binabati ko rin ang lahat ng dumalo dito sa DTI Turnover Ceremony ngayong hapon.
First and foremost, let me thank President Ferdinand Marcos Jr. for nominating me to be the DTI Secretary in his Cabinet. I genuinely appreciate his trust and confidence. It is an honor and privilege for me to be allowed to serve our country, particularly in this time of pandemic recovery and new emerging uncertainties.
In the phase of the challenges before us and DTI in the coming years, I can say that I am fortunate to be inheriting from my predecessor, DTI Secretary Ramon Lopez, a sterling legacy. This legacy comprises a solid and well-performing organization consisting of all the colleagues, here and not here, in their rich performance and success record. I thank Sec. Mon and his team in leading us a DTI with six years of enduring commitment to innovation, hard work, and growth for the benefit of our people. I can see also the buildup that has led to where we are now coming from the successions of former DTI Secretaries as presented earlier.
Even after two years, the threat of COVID-19 lingers and continues to impact lives and livelihoods not only in the Philippines but the whole world. At the same time, new crises have jumped into the fray: war in Ukraine and its attendant effects on global trade has sent soaring the cost of necessities everywhere. This has nudged our disadvantaged countrymen and struggling businesses farther into economic insecurity. Much reform has already been done towards creating an enabling environment for business in our country. As the numbers show, the Philippines has been remarkable in growing despite the devastation of the pandemic, but our country continues to contend with increasingly stiff competition from our neighbors while novel technologies are changing the global market dynamics.
We need to see even more improvements in our human capital development, technology capability, infrastructure, and regulatory and legal environment. With these solutions it will bring sweeping changes to our economy and take it on even higher level of performance. DTI has been doing its part, how can DTI further help in this effort?
Let me now talk about some of my priority plans to fulfill primary mandates of DTI in creating jobs, supporting businesses, and protecting the consumers. This is not the final strategy that we will adapt. These are just my initial thoughts given the level of knowledge that I have acquired over the past few days that I have been briefed about DTI.
Number 1, Support for Micro, Small and Medium Enterprises or MSMEs. In times of hardship like now, the DTI’s mandates have become even more critical to our collective nation-building effort. We carry an immense responsibility on our shoulders defined in numbers by 99.5% of business establishments in the Philippines, employing 63% of the country’s workforce, and accounting for almost half of the nation’s gross domestic product. I am referring to the small businesses sector.
My plans is for DTI to continue promoting the development of our small businesses or MSMEs, the backbone of the economy, as DTI has been doing for over the past decades. Standing alone and standing still, our small businesses will find it difficult to develop and become sustainable. We want our small businesses to be driven by science, technology, and innovation to meet changing market demands for quality and new products with effect.
We want them to embrace digital transformation so that they can improve operating efficiency, reduce cost, and earn profits even as they make their products more affordable to the consumers. Our objective is to enable businesses to grow and graduate from micro to small, from small to medium, from medium to large. We want to integrate them into to the domestic and global value chains so that they can become formidable players into the domestic and global economy.
To help address the food security challenges, we will collaborate with the Department of Agriculture to improve the food value chains through upgraded transport and logistics facilities, including cold storage and cold chain facilities. Increase community level, value-adding, effective local government enabled market matching and mechanism to our food waste reduction. We will promote digital technology to assist in streamlining agricultural supply chains to link producers more directly to the markets and eliminate unnecessary middle men.
I am discussing this in the context also of MSMEs because most of the enterprises involved in agri-business are of that size. Of course, there are also large ones, but we are more concerned with the many that are in the small businesses.
We will also pursue urban food production and support small businesses involved in supply chains. We will also promote the development of local industries that directly impact the country’s food security. DTI will assist the Department of Agriculture in strengthening cooperatives to achieve economies of scale even in those modest farm sizes. Particular focus will be given to coconut, coffee, and cacao producers to which substantial funding has been devoted.
Aside from promoting food production, developing regional industries is also a priority. I would like us to continue the “One Town, One Product” and Shared Service Facility (SSF) programs where we directly invest in the upgrading of MSMEs technological capabilities.
We also aim to further bridge the state universities and colleges (SUCs) to local entrepreneurs towards improving the global competitiveness and promising industry clusters. Our country can be competitive, but we have to do it region by region. Otherwise, if we will just be focusing on the National Capital Region, there will be a lot of laggards around us. Everyone should progress, and no one should be left behind.
Second priority, Promote Manufacturing. Manufacturing is our guarantee to sustainable and inclusive growth for our country because manufacturing provides more stable and more higher paying jobs. Manufacturing will remain a priority under my watch. We, in DTI, will take the lead in positioning for success the manufacturing sectors in which we possess strategic advantages. We will update or craft industry roadmaps in key industries and sectors with the most significant strategic importance and/or potential for massive job generation, including tourism, creative industries, agriculture and agri-business, forestry, manufacturing, construction, responsible mining, BPO, and MSMEs, among others.
We will continue implementing DTI’s manufacturing resurgence program which aims to develop a globally competitive manufacturing industry. We will introduce improvements as the domestic and global circumstances evolve with technology disruptions and with the changing geo political situation. We will work to close supply chain gaps, provide access to raw materials, and expand domestic and export markets for Philippine manufactured products.
We will also seek to build agriculture-based manufacturing industries to generate employment and support small holder farmers and agri cooperatives through product development, value adding, and integration with big enterprises for marketing and financing purposes.
We will focus on key industries like electronics, aerospace, automotives, IT-BPM, and minerals like copper. We will look at global value chains, specifically in electronic vehicles and mineral processing. In this regard, we will seriously consider the findings of a recent World Bank study that indicates potential in the country of industrial sectors in the following three clusters: 1) Industrial Manufacturing and Transport, 2) Technology and Media Telecommunication, and 3) Health and Life Sciences.
One particular DTI program currently is the Comprehensive Automotive Resurgence Strategy (CARS) Program, which provides time bound output or performance based fiscal support to attract strategic investment in motor vehicles and parts manufacturing. Our objective is to increase the local value-added and export contributions to the economy of the automotive industry. And why not? A significant portion of the country’s 10 million 4-wheel and 2-wheel units will need to be replaced over the next ten years or so. That provides a large enough market for domestic production of vehicles, motorcycles, parts, and services.
In the pharmaceutical sector, we will also encourage multinational pharmaceutical companies operating domestically to outsource their contract manufacturing to local players. We will also continue to develop the country into a center of excellence in the design of semiconductors. In regard to semiconductors, I would like to say that the pandemic has increased interest in data centers across the globe and the Philippines is no exception as the destination of the new data centers that are being established worldwide. The local data center market saw significant activity beginning last year with several players announcing their plans to develop facilities across the country.
Philippines is an attractive location for hyperscalers as the country tops social media and internet usage worldwide. Our e-commerce adoption grew from 76% and 80% in 2020 and 2021 respectively. A very substantial increase in volume.
The Philippines is seeking to address disruptions in the supply of the critical minerals. Known to the Philippines as the vast resources of big metals such as nickel and cobalt, key inputs for battery manufacturing and copper, essential input for the production and manufacture of technology products. The Philippines can be a vital partner for these critical minerals not only as exporters but processors and producers of semi-finished and finished products.
Third priority, Improve the Ease of Doing Business. We’ll work towards the reduction of the regulatory burdens. Expanding the Ease of Doing Business Act in coordination with the DICT. We will support accelerating the fulfillment of e-government in our country. We will also aim to foster greater investment and competition in logistics and connectivity services. We will continue to work on harmonizing cross border data regulations and with key trading partners to facilitate better Ease of Doing Business. We will also push for full implementation of policies already in place to inspire confidence in both firms and consumers whether based here or abroad.
DTI will help solve the country’s infrastructure gap, as well, especially in physical and digital connectivity. Responding to these deficiencies will help secure our country’s access to a competitive and clean energy supply, as well as really show us as having improved Ease of Doing Business in our country.
Fourth priority, Attract Investments and Expand Exports. We will continue to push for the immediate ratification of the Regional Comprehensive Economic Partnership agreement and other trade agreements because as you may know the Philippines has the least number among the ASEAN group that have signed the FTAs with other foreign countries. These agreements will diversify the country’s exports in terms of products and services and country destinations, and enhance the country’s attractiveness to foreign investments.
Most foreign investments in China, for instance, are export oriented industries. In fact, they are from big multi-nationals having transferred their production facilities to China and using China as production place. Without these FTAs and RCEP, the Philippines will not be an attractive location for such types of export-oriented enterprises.
Sixth priority, which is more inward looking, we need to take a second look at DTI’s Organizational Structure and Processes because of the changing sector priorities. There is now a very clear and definite shift to digital technology so we need to really gear up our expertise to that particular area. As the country moves into its recovery and expansionary mode, we will do this review and see how we can contribute seamlessly and in timely fashion to the implementation of the earlier initiatives that I discussed. The tweaking of a workforce budget may be needed.
My approach to organization is I don’t believe too much in a very hierarchical structure. We are inheriting a government structure, a bureaucracy type structure where there are so many layers: you have the Secretary, Undersecretaries, Assistant Secretaries, Directors, Assistant Directors, and so on down the line. That creates a lot of layers. Before I get to know the problem, maybe it could have taken already days if not weeks through the bureaucratic mill. I want to know right away if there is a problem. My door is open for direct communication by anyone who has something important to share. Not gossip, but something that will really help advance what we are doing for the country.
I believe in agile organizations. For those of you who have had training in agile organizations, you will know that an agile organization is a flat organization. There may be different ranks but we organize as the problem presents itself. The problem that we need to solve. We should have flexibility in organizing teams, taskforce, and small groups to tackle problems, regardless of the ranks. I maybe the Secretary and most of the time I’ll be giving orders from behind, but there will be times, like a true general, I will be leading from the front. We will have to work together in addressing problems as they evolve. Problems will crop up given the very volatile and uncertain situation that we still face, even the geo political developments around us.
We will try to breakdown silos between departments and between DTI and the attached agencies and GOCCs because that’s the only way we can fully harness the capabilities of our people to address problems that will come our way. Inter- and intra-agency and department functions relationship may need to be clarified and realigned to be able to have this flexibility and communication and the breaking down of silos.
In closing, I invite you all to join me in reigniting the private sector businesses which are the country’s engines of growth. Run with me in resetting the momentum, not in a 100-meter dash but in the sustained marathon of sorts, facing a multi-kilometer run challenge to rejuvenate the heart of the Philippine commerce and strengthen the muscle of industry coming from the devastation of the two-year pandemic and the other uncertainties we are facing.
We will help the business do well, we will help them to make profits, and we will help businesses to do good to share the prosperity with our countrymen. Now, we are going to work together and, in that regard, I say we must succeed not because we have a reputation to protect but because we have a country to serve.
Thank you. ♦
Date of Release: 1 July 2022