Phl industrial policy needs to change

This was the urgent advice of Rafaelita Aldaba, who recently retired from the Department of Trade and Industry as undersecretary for competition and innovation, and who is now a strategic advisor for the Department of Education and an emeritus researcher for the Philippine Institute for Development Studies, or PIDS.

- MARIANNE GO

She has written a PIDS discussion paper titled "Navigating a New Era of Reciprocal Tariffs: Strategic Implications for the Philippines and Selected ASEAN Economies," which analyzes the impact of the tariff changes that the Trump administration has announced and plans to implement following further negotiations.

In a presentation to members of the Monday Circle during a breakfast meeting at the Westin Manila last Monday, Aldaba stressed the need to align the country's trade and industry sectors to deal with a fragmenting global trade situation.

She cited the need to transition from assembly-centric to upstream activities such as semiconductor design, advanced packaging, power electronics, medical devices, artificial intelligence (AI) hardware components and digitally enhanced manufacturing services.

At the same time, she said, the government must prioritize investments in critical sectors such as semiconductors, electric vehicle (EV) components, textiles, green metals and sustainable electronics.

The government, she said, needs to strategically use subsidies and performance-based fiscal incentives to catalyze investments in high-value, innovation-driven and ESG-compliant production.

There is also a need, she said, to align technical, vocational and higher education programs with 21st-century industrial needs, as well as digitize and upgrade logistics and customs operations.

Alongside these actions, Aldaba also emphasized the need to put in place trade defense and monitoring mechanisms such as WTO-consistent safeguards, anti-dumping and countervailing duties to defend against import surges, unfair pricing and trade distortions.