National Industrialization

for Science and Technology Development

Dr. Giovanni Tapang

Professor, National Institute of Physics
University of the Philippines Diliman
STS 2017
 Walkthrough

1. Introduction
2. Science and technology in the Philippines
3. National industrial policy
4. Critical innovation for national industrialization
State of science and technology

• Philippine science and technology

• Underdeveloped
• Stunted

• Reflected on statistics
• Education
• Industrial growth
• Lack of industries
• Massive poverty
Philippine poverty
and backwardness

• Widespread poverty
• 21.9 M live below P60/day
• Worsening inequality
• Agricultural and industrial
backwardness
• Overly reliant on cheap labor
export (OFW), foreign capital
and debt
• 2012 data: Agri 12.3%, Industry 33.3 %, Services 54.4% (2011 est)
• Feb 2013 data: Agri 12.4 %, Industry 31.3%, Services 56.4 % (2012 est)

• “De-industrialization”
and shrinking manufacturing: As small as 1950s
Falling food production per capita, rising agricultural trade deficits
Overly reliant on cheap labor export (OFW), foreign capital and debt

SERVICE-DOMINATED, BACKWARD AGRARIAN, PRE-INDUSTRIAL

• 2012 data: Agri 12.3%, Industry 33.3 %, Services 54.4% (2011 est)
• Feb 2013 data: Agri 12.4 %, Industry 31.3%, Services 56.4 % (2012 est)

• “De-industrialization”
and shrinking manufacturing: As small as 1950s
Falling food production per capita, rising agricultural trade deficits
Overly reliant on cheap labor export (OFW), foreign capital and debt

SERVICE-DOMINATED, BACKWARD AGRARIAN, PRE-INDUSTRIAL

 Weak Manufacturing
• Manufacturing industry has been weak, growth has been slow and
contribution to value added and employment has been limited.
• ..Industrial structure remained “hollow” or “missing” in middle and
medium enterprises... never seriously challenged the large
entrenched incumbents.
• Linkages between SMEs and large enterprises [remain] limited
• …Heavy concentration of Philippine exports on three major products
groups: electronics, garments and textiles and auto parts
• Within these major product groups, exports are highly concentrated in
low value added and labor-intensive products sectors.

Twenty Years after Philippine Trade Liberalization and Industrialization: What Has Happened and Where Do We Go from Here
Rafaelita M. Aldaba, Philippine Institute for Development Studies
DISCUSSION PAPER SERIES NO. 2013-21
SWS surveys:
(1Q 2013): 25.4%
unemployment
(4Q 2013): 27.5 %
unemployment
47.2%-49 % in the 18-24
age range, 30.2% -32.9 %
for 25-34 (Dec 2012 SWS)
52.3 % in the 18-24 age
range (4Q 2013 SWS)
Around 10.6 million
unemployed (IBON) + 5
million (due to Yolanda)
Emigration of Science and Technology Educated Filipinos (1998-2006) and 2011 DOST SEI studies

Brain Drain Worsens

• In 1998, there were 9,877 outbound science workers. In 2009,
the number has grown to 24,502 (2.5x)
• More than half of these are health professionals and nurses
while a fifth are engineers.
• 23 % of total science workers pool go abroad to seek
employment.
• Philippines ranked 96 out of 139 nations in terms of
availability of scientists and engineers in the 2010-2011
Global Competitiveness Report by the World Economic
Forum.

Emigration of Science and Technology Educated Filipinos (1998-2006) and 2011 DOST SEI studies
Emigration of Science and Technology Educated Filipinos (1998-2006) and 2011 DOST SEI studies

Brain Drain Worsens

• The number of scientists and engineers currently
engaged in research and development (R&D)
activities across the Philippines is about 8,800.
• Allocation for DOST comes to only 0.085% of GDP
• (1/3 of Thailand's 0.26% and 1/8 of Malaysia's 0.69%) [2012]
UNESCO Science Report 2010: researcher population
density of the Philippines is 1 per 12,345 population in
2009.
Singapore (one per 164), Thailand (one per 3,215), Indonesia (one
per 6,172) and Vietnam (one per 8,695).

Emigration of Science and Technology Educated Filipinos (1998-2006) and 2011 DOST SEI studies
 Current situation

• Lack of basic industries

• No program for rural
industrialization, agricultural
modernization
• No genuine infrastructure in
energy, transportation,
communications, information
technology and basic
services
 National
Industrialization
 National industrialisation
• Maximum self-sufficiency in industrial Heavy industries
production of capital goods
 base metals, basic
chemicals, petrochemicals,
pharmaceuticals, machinery,
precision instruments,
electronics, and consumer
• Key to establishment of modern and durables.
LEADING FACTOR
diversified industrial economy
• Secure livelihood
• Satisfy basic needs Light industries
processing of grains, cereals,
• Ensure rapid and sustained economic growth
 fruits and vegetables,
beverages and dairy products,
meat and poultry; aquaculture
• Production primarily for domestic and fisheries, clothing-footwear,
textile and garment industries

consumption not exports and mass housing

• Generate and mobilize domestic capital BRIDGING FACTOR

• Generate and develop domestic market
• Create jobs with living wage Agriculture
• Raise purchasing power of peasantry (modernized and
mechanized)
BASE
 ...as opposed to...

• Export of agricultural and

extractive raw materials
• Importation of surplus finished
goods, agricultural
commodities and capital,
• Re-export of reassembled or
repackaged imported
manufactures
 Is there economic basis for
national industrialization?

• Comprehensively rich natural

resource base
• Metals, minerals, energy,
biodiversity, marine resources

• Skilled forces of production

• Workers, peasants,
professionals (incl. scientists
and technologists)
 Some features of
a national industrialization policy
 Public sector control and
operation of vital industries
• Nationalization of vital and
strategic enterprises
• Main source of raw materials
• Main lines of distribution
• All public utilities
• Social services (housing, health,
education, social security)

• Dismantle and control big

monopoly commercial
operations
Active/biased support for Filipino firms

• Tariff protection Heavy industries

• chemicals, petrochemicals,
Cheap/subsidized credit
• Tax exemptions/credits
• Bias for Filipino firms in government
procurement
• Build state enterprises and/or public
control
base metals, basic
pharmaceuticals, machinery,
precision instruments,
electronics, and consumer
durables.
LEADING FACTOR
Light industries
processing of grains, cereals,
fruits and vegetables,
beverages and dairy products,
meat and poultry; aquaculture
and fisheries, clothing-footwear,
textile and garment industries
and mass housing
BRIDGING FACTOR

Agriculture
(modernized and
mechanized)
BASE
 Limited foreign corporations and
entities in manufacturing enterprises

• Foreign investments will be

allowed only in clearly
unreplicable advantages in terms
of technology transfer or access
to capital, products and markets
• Equity limits: may be allowed a
minority share (not more than
40%)
• Real technology transfer
• Local content and local labor
requirements
 Financing National Industries

• Public finance to maximize funds for the

realization of the strategic plan
• Eliminate bureaucratic, military and other
counterproductive expenditures (aka
pork barrel)
• Remove automatic appropriation for
foreign debt service
• Balance accumulation and consumption
Legislator → NGO
2007-2009
size of lines correspond to
amount of money transferred

Text

Network Visualization of
PDAF releases 2007-2009
nodes = Legislator and NGOs
thickness of lines = amount of money
Anong nawawala dahil sa pork?
Genuine national development
with a domestic industrial policy
 Agrarian Reform and Rural Development
• National industrialization is based on Heavy industries
base metals, basic
agrarian reform and a dynamic rural chemicals, petrochemicals,
pharmaceuticals, machinery,
economy precision instruments,
electronics, and consumer
• Land distribution durables.
• Stronger agri-industry linkages LEADING FACTOR

• Improved farming technologies Light industries

processing of grains, cereals,
• Break agricultural cartels (ex. rice, corn) fruits and vegetables,
beverages and dairy products,
meat and poultry; aquaculture
and fisheries, clothing-footwear,
textile and garment industries
and mass housing
BRIDGING FACTOR

Agriculture
(modernized and
mechanized)
BASE
 Agriculture as base
Heavy industries
base metals, basic
chemicals, petrochemicals,
pharmaceuticals, machinery,
precision instruments,
• electronics, and consumer
Provide means of subsistence durables.
• Source of industrial raw materials LEADING FACTOR
• Vast market for industrial products;
• Main reservoir of labor power for Light industries
industry and other sectors of processing of grains, cereals,
fruits and vegetables,
beverages and dairy products,
economy meat and poultry; aquaculture
and fisheries, clothing-footwear,
• Important source of accumulation textile and garment industries
and mass housing
funds BRIDGING FACTOR
• Biotechnology, high yield farming,
low inputs, efficency, etc.
Agriculture
(modernized and
mechanized)
BASE
Heavy industry is leading factor
Heavy industries
base metals, basic
• Provide modern machinery, chemicals, petrochemicals,
pharmaceuticals, machinery,
motor power, chemical precision instruments,
electronics, and consumer
fertilizers, pesticides, and other durables.
means of production for LEADING FACTOR
agriculture
• Produces various light industrial
machines and light industrial Light industries
processing of grains, cereals,
fruits and vegetables,
raw materials
 beverages and dairy products,
meat and poultry; aquaculture
and fisheries, clothing-footwear,
textile and garment industries
and mass housing
• Provides necessary conditions BRIDGING FACTOR
for technical innovation and
development of the national
economy as a whole and Agriculture
(modernized and
guaranteeing independence mechanized)
BASE
Light industry as a bridging factor
Heavy industries
base metals, basic
chemicals, petrochemicals,
pharmaceuticals, machinery,
precision instruments,
electronics, and consumer
• Produces necessary consumer durables.

goods for rural and urban LEADING FACTOR

areas
• Indispensable in raising living Light industries
standards processing of grains, cereals,
fruits and vegetables,
beverages and dairy products,
• Requires smaller investments meat and poultry; aquaculture
and fisheries, clothing-footwear,
but provides quick returns textile and garment industries
and mass housing
• Accumulation fund for BRIDGING FACTOR
expansion of heavy industry
Agriculture
(modernized and
mechanized)
BASE
Prospects?
Prospects?
Patriotic Science and Technology

• Science and technology

development is linked with
an industrial economy
geared for pro-people
development

• Requires national
industrialization preceded by
genuine agrarian reform

• United with other

progressive sectors
 National Industrialization
for Science and Technology Development

Dr. Giovanni Tapang

Professor, National Institute of Physics
University of the Philippines Diliman
gtapang@nip.upd.edu.ph
STS 2017