His Excellency, President Ferdinand Romualdez Marcos Jr., fellow workers in government, and our business partners in the private sector from Singapore and the Philippines—a pleasant afternoon to all.
The Strategic Investment Priority Plan (SIPP) has three tiers. These are:
Tier 1 is for modern agriculture and food processing, design-focused industries, energy efficiency projects, health and medical products, and infrastructure projects, among others.
Tier 2 includes green metals and electric vehicle (EV) manufacturing, health- related activities such as vaccine production, defense-related activities, steel, and chemicals.
Tier 3 are activities that are expected to generate research and development (R&D), breakthroughs, new knowledge, and intellectual property.
In line with SIPP, we leverage on the Fourth Industrial Revolution technologies and our existing industrial strengths and competencies to upgrade, diversify, and reposition the country’s global value chain participation. Our industrialization strategy targets four industry clusters.
First, the Industrial, Manufacturing, and Transport cluster. This cluster opens investment opportunities in aerospace, automotive, and semiconductors.
The Philippine aerospace sector has capabilities in flight control actuation and oxygen systems manufacturing, aviation/aerospace engineering training, as well as aircraft maintenance, repair, and overhaul (MRO). For example, located in the Philippines is the number one aircraft interiors company in the world (Collins Aerospace) and the world’s leading aircraft MRO company (Lufthansa Technik). Two weeks ago, Lufthansa Technik Philippines inaugurated its expansion phase. We call it hangar A1 that added 300 more engineers and other experts to bring the total of compliment personnel to 3000 and other experts. By the way, Singapore Airlines also has maintenance facility in the Philippines, located in Clark. While Lufthansa Technik is located in the Ninoy Aquino International Airport.
Climate change imperatives are prompting a shift to Electric Vehicles (EV). We will enter the EV global value chain by producing pollution reduction devices and other green materials that go into the production of these vehicles. On semi-conductors, we want FDIs that capture added value, rather than just low cost. That is now the basis of competition in BPO, it is value addition and not cost saving. And expand the operation of semiconductors in the country.
In the Technology, Media, and Telecommunication cluster, we will optimize the fact that 82% of our BPOs and shared services centers serve global markets. In the next decade, BPOs will be a cross-cutting contributor to the other global value chains that they support. As the pandemic increased global interest in data centers, the Philippines is now the destination of new data centers being established worldwide. We are looking at the hyperscale industry as the country’s next growth engine.
Few weeks ago, we inaugurated or launched the Jupiter Cable System of PLDT, in partnership NTT of Japan. The capacity of this Jupiter cable system exceeds the capacity of the other existing cable connections of the Philippines to other countries.
The third cluster is the Health and Life Science (HLS) cluster, which plays a strategic security role in a pandemic. Smaller, agile pharmaceutical companies can take a more critical role in bringing medicines, including generics, and other health services to the Philippine market and be of the global value chain. We have local pharmaceutical companies that have grown a lot over past few years and they are poised to participate in the global value chain for pharmaceuticals and as they are doing now but merely serving the local market.
In the Modern Basic Needs and Resilient Economy cluster, we promote long-term sustainable and inclusive growth through food security and development of green ecosystems. We will link manufacturing and agriculture. We will bring processed food, textiles, and natural fibers together with design, R&D, engineering, IT and digital services, marketing, financing and after-sales customer support. Foreign financing and credit companies can use data from the digitalization of Philippine commercial processes to test our market.
We are working with scientists from the National Academy of Science and Technology (NAST) and the Philippine American Academy of Science and Engineering (PAASE), this is an association of scientist and engineers spread over the world but all of are Filipino descents and they are now giving back to the country when they were part of brain drain in the past. This is PAASE willprovide science, technology, and innovation (STI) solutions affecting our regional industries. Injecting STI into the production and processing of high-value crops such as coffee, cacao, coconut, and abaca would further develop the STI ecosystem throughout the country not just in Metro Manila and the CALABARZON.
Upon President Marcos’ directive, we will continue to “Build Better More”, this is building more infrastructure facilities all over the country. We are talking here of transport and logistics, energy, water resources, information and communications technology, social, and agri-fisheries modernization and food logistics. There is always this problem of moving excess food supply from areas of deficit. We will solve that through technology driven logistics.
Let me cite another example, we are stretching Manila’s direct catchment area for talent to support the advanced sectors I was talking about. It is full speed ahead for the 147 kilometer commuter rail that will connect our technology zones in CALABARZON south of Manila to Clark Airport North of Manila. For perspective, this corridor is roughly half the distance from Singapore to Putrajaya in Malaysia. By the way the Clark Airport is a commonage of the Changi Airport of Singapore.
Our public works program aims to achieve seamless transport system, as I said the low development areas to the higher faster growing areas in the country. This goal is to protect marginalized sectors, in the regional areas and move towards a sustainable and resilient community that is inclusive to all.
Let me now talk about, our policy in energy, for the first half of 2022, our Board of Investments, which is attached to my Department, has approved a total investments of renewable energy amounting to approximately 6 billion USD and these investments if they come through will generate 3000 new jobs1 and to provide strategic direction to the country’s energy requirements, the Philippine Energy Plan, that will run up to 2040 supports a technology-neutral approach for the optimal energy mix to energy security. We are continuously pursuing studies on the different energy fuel and technology options, and the feasibility of nuclear energy is also being explored.
To support the digital transformation of the whole government in different levels as well as digital transformation of our MSMEs, we are launching an e- commerce platform to initiate and onboard MSMEs into the digital economy.
Let me know talk about two important centers that we are putting up in the country led by the Department of Trade and Industry. 2022 will mark the takeoff of the Philippines’ Artificial Intelligence (AI) Roadmap as we establish this year the Center for AI R&D (CAIR) and the Industry 4.0 Pilot Factory (I4PF).
CAIR will be a public-private partnership hub where data scientists and researchers can perform collaborative AI R&D for industries, produce AI products and services, provide AI trainings and AI learning materials, and support the digital transformation of industries including small businesses and large enterprises.
We continue to attract AI R&D of multinational and big tech companies to locate in the Philippines. To add to R&D operations of some large global companies that are in the Philippines now, but we are putting up our own center for AI research to support those who cannot access these international centers for AI research.
The other facility that we are putting up, is the Industry 4.0 factory (I4PF), again, geared to helping micro, small, and medium enterprises (MSMEs) but also large enterprises. This facility will have hands-on lessons on robotics, automation, the Internet of Things, and many more. It will serve as a co-maker and co-working space for R&D and prototyping. Our partner here is Siemens of Germany, yesterday I went to their facility here in Singapore and spent about 1 and half hours there and they walk me through on what they have. Because what they have here, we will establish in the Philippines. So, that we will be able to serve the local industry that cannot afford to pay the fees of these international AI research facilities. We have the talents, we are partnering with Asian Institute of Management (AIMs) that is already running masters and doctoral programs in data science. There are eight other universities that are already offering programs in data science. So, we will have good source of talent that will be able to operate these two facilities I’m talking about.
urrently, our country hosts 50-plus tech startup centers that already use AI as a core technology. If we grow the AI ecosystem further, it can contribute USD92 billion annually, or about 12% of GDP, by 2030, This is according to EDBI – Kearney from Singapore.
To disperse innovation throughout the country and drive regional industrialization, we are also establishing Regional Inclusive Innovation Centers (RIICs) that will lead stakeholders in the regions toward collaboration, innovation, and entrepreneurship.
In closing, we envision a prosperous economy driven by Science, Technology, and Innovation. We will build dynamic industry ecosystems to generate quality jobs, meaning more stable ang higher paying jobs, advance environmental sustainability, and ensure shared prosperity for all. Together, we will make it happen in the Philippines.
Thank you.
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Date of Release: 7 September 2022