Business sector eyes services coalition for growth, development

• Source: http://www.pna.gov.ph/index.php?nid=1&rid=801344
• Monday, September 7, 2015

(PNA), RMA/PND/SSC

CEBU CITY, Cebu, Sept. 7 (PNA) -- The business sector on Monday proposed the formation of a services coalition that would enable various professions to enhance the growth of the service industry in the country.

In a presentation during the Asia-Pacific Economic Cooperation (APEC) Regional Conference of Services Coalition, George Barcelon of the Philippine Chamber of Commerce and Industry (PCCI) said bringing the services players together in a coalition could highlight the priorities of the industry and strengthen it in the long term.

Barcelon said that given the rapid expansion of trade in services, Foreign Affairs Undersecretary Laura del Rosario, who also chairs the APEC Senior Officials’ Meeting, has expressed support for the idea and has called on the Makati Business Club and the Philippine Chamber of Commerce and Industry to co-convene the coalition.

"The private sector fully supports this initiative, which is also partly the reason why I'm standing before you," he told the APEC delegates at the Radisson Blu Hotel here.

"We envision the coalition to bring together service associations and formulate strategies for the development of the service sector."

Groups supporting the coalition, he said, would have their first official meeting after the APEC conference in Cebu, having laid the initial groundwork for the effort since 2014.

They have also identified roadmaps for specific service sectors, Barcelon said, citing that the Information technology – business process outsourcing (IT BPO) sector has already developed and successfully implemented its own roadmap.

"The logistics sector led by the Philippine International Sea Freight Forwarders Association and the United Port Users Confederation are now in their third revision of the private sector-led Philippine logistics roadmap," he noted.

"We are positive that other service industries, such as tourism, medical, health service, construction, education are on the same path."

The Philippine services coalition is a work in progress, Barcelon pointed out, adding that they have realized the need to work closely with various service sectors to gather inputs and hopefully influence government policies.

Unlike other economies, he said, the export of services rather than manufactured goods, has driven the economic growth of the Philippines in the past decade.

He however stated that despite its significant contribution to the economy, the potential of the service sector has yet to be maximized.

"So to leverage the potential of the sector, we encourage the government to prioritize policy reforms in infrastructure, education, cost of doing business, so that the services coalition would be organized to make the necessary reform," he said.

Last year, services recorded a 6 percent growth, accounting for 56 percent of the economy, Barcelon reported.

In terms of employment, he said, the number of people employed in the services sector increased to 21.2 million as of last April.

The growth of the service sector is fueled by the remittances of overseas Filipino workers (OFWs), as well as the booming IT and tourism industries.

Contributions from OFWs alone account for 9 percent to 10 percent of the gross domestic product (GDP) in the past 10 years.

The case of the Philippines, he said, is unique because it transitioned from agriculture to services rather than from agriculture to manufacturing as the principal engine for economic growth.

"The strength of the Philippine service sector lies in (the country’s) rich human and natural resources. The Philippines' remarkable performance in the IT BPO industry is primarily attributed to its large educated workforce, its strong English language capabilities, and high flexibility and productivity," he pointed out.

The expansion of the IT sector is supported by government fiscal incentives for foreign investors, which has led to the expansion of the real estate sector, he said.

The country's huge pool of talents, such as programmers, designers, graphic animators, musicians and performers, has penetrated the world scene, enabling Filipinos to enjoy a well-deserved international reputation, Barcelon said, adding that in tourism, the world-class tourism destinations, hospitable people, and their proficiency in English are key to the growth of the sector.

The country also has highly skilled professionals -- doctors, nurses, engineers, teachers, seafarers -- but the lack of employment opportunities in the country has compelled them to go abroad, he noted.

Barcelon estimated the number of OFWs at 2.3 million, 96 percent of whom are overseas contract workers.