Industrial policy for the Philippines

Industrial policy formulation or industrial strategy is very much the rage all over the global economy today.

- BERNARDO M. VILLEGAS

(Part 1)

It has gone much beyond its earliest form in the middle of the last century when the governments of what countries that eventually rose as the "tiger economies" — such as Singapore, Hong Kong, Taiwan, and South Korea — adopted specific economic policies that favored the growth of certain sectors that were considered "most likely to succeed" because of perceived competitive advantages. Examples of such government policies were tariff protection, subsidized interest rates, undervalued currencies, or depressed wages.

Today, the ones most aggressive in adopting industrial policies are no longer the developing countries but the more developed countries like the United States and the United Kingdom. The very high tariff rates being imposed by the Trump Government on imports from China, India, and other countries are examples of modern-day industrial policy. Such protectionist moves are clearly meant to bring back to US soil the many manufacturing sectors such as automotive, electronics, and pharmaceuticals that migrated to Asia and other regions with lower wage costs. In the UK today, the centerpiece of industrial policy is a set of strategies for the eight industrial sectors which, on various metrics, offered the greatest growth potential, such as advanced manufacturing, life sciences, the creative industries, and financial services.