MANILA— The Philippines’ current leadership in the APEC Group on Services can provide a necessary boost to the dynamism of our services sector and the attainment of inclusive growth, according to the National Economic and Development Authority (NEDA).
“Services is the largest economic sector and is a major employer in most APEC (Asia-Pacific Economic Cooperation) economies, including the Philippines. For full-year 2014, it accounted for 56.7 percent of our country’s GDP and 53.6 percent to total employment,” said Deputy Director-General Emmanuel F. Esguerra, who serves as the convenor of the APEC Group on Services (GOS).
“This is a manifestation of how big our services sector is. Yet, there are still underlying potentials that must be tapped and developed. The APEC fora provide good venues to pursue these,” he added.
For the First Senior Officials’ Meeting (SOM1) of the GOS, the Philippines, along with other APEC member economies, aims to enhance current initiatives by building on last year’s developments and focusing on the integration of Small and Medium Enterprises into services global value chains (GVCs).
Many services are being undertaken in the production and sale of a product, whether it is a good or a service. Other sectors such as manufacturing have a number of services embedded in their processes. These include design, quality control, inventory systems, transport, logistics, wholesale/retail, marketing/advertising, repair/maintenance, installation/construction, finance after-sales services.
Firms in the services sector itself also outsource or move their non-core services functions offshore to their affiliates, as they seek to move up the value chain. The services then become value added to the final product.
“This ‘tasking’ in the production process of firms or in the GVCs are where opportunities for SMEs in the services industry reside,” said Esguerra.
For the APEC region, total services exports account for 20.27 percent. However, when viewed through a value-added lens, services share to total exports increases to 39.08 percent.
“Looking at services this way shows us that it has an important role not only in big industries engaged in production but also in our small and medium enterprises (SMEs). In fact, among APEC economies, the Philippines has the highest GVC participation in electrical and optical equipment,” said Esguerra.
“These are only among the reasons why the government is keen on enhancing regional cooperation and engaging in partnerships in services. In our pursuit of inclusive growth, services open numerous opportunities for employment generation and poverty reduction – goals that we have set in the Updated Philippine Development Plan 2011-2016,” he added.
For full-year 2014, services grew by 6.0 percent and generated 599,000 jobs, the highest among the country’s major sectors.
The NEDA is also host to four other related meetings of the APEC SOM1 from January 31 to February 7, 2015 in Clark Freeport Zone, Pampanga.