THE county’s vast potential in the services sector remains widely untapped, a research consultant of the Philippine Institute for Development Studies (PIDS) said.
While saying the services sector has significantly contributed to the Philippine economy through increased employment, investment and revenue generation, there are still vast opportunities left untapped to fully exploit its role in the economy, Ramonette Serafica of PIDS said.
"Exploring and maximizing opportunities in the services sector can eventually make the country the heart of services trade in the Asia-Pacific region,” she said.
The services sector represents 44.15 percent in the gross exports in terms of service value-added.
In her study, Serafica said the country’s strong information technology business-process outsourcing industry places the country in a comparative advantage as a net exporter of services.
She said advantage is anchored on the country’s pool of skilled, semi-skilled and low-skilled workers.
She added that the technological changes in information and communication technology and the business models of multinational companies that are leaned toward outsourcing and offshoring of services have leveraged the country’s human capital.
The Philippines also has a strong potential to become a major hub in ship repair because of its strong labor force given the country’s geographical location, which is ideal as a logistics hub for cargo and its deep seashores that make the country suitable as a ship-repair hub.
The overseas Filipinos across the globe, estimated at more than 10 million to date, are a natural market for Philippines services, Serafica added.
Despite the country’s decades of experience as a supplier of labor, there should be a comprehensive services- export initiative to help facilitate the overseas expansion of other services, Serafica said.
There should be "an umbrella program dedicated to services exports that would help create the Philippines as a valuable brand in services trade.”
Based on the World Bank’s services- trade restrictiveness index (STRI), the Philippines has "one of the most restrictive policy environments for services,” Serafica noted.
STRI is a gauge of a country’s degree of discriminatory restrictions in financial services, telecommunications, retail, transport and professional services.
"Among the sectors included in the index, it is in professional services where the extent of restrictiveness [of the Philippines]is highest,” Serafica said. In addition to restrictive policies, anticompetitive business practices also exist, she noted. A government policy on innovation and human resource development (HRD) is needed to further create an environment conducive to improving competitiveness.
She cited a World Bank report where many countries, both developed and developing, are using innovation as the foundation of competitive industries from agriculture to services. This innovation involves the use of new technologies and practices, as well as HRD policies that will ensure high-quality labor force, she said.//
PHL still not fully utilizing potential of services sector
