PH better off focusing on services–economist
Despite the uncertainty over America’s tariff policy, the Philippines should focus on harnessing its most valuable resource—skilled workforce—rather than pursue manufacturing like neighboring countries to strengthen its position in global trade.
Ines Lam, associate director for Asia economics at banking giant HSBC, said the country’s “unique value proposition” is its people, particularly their “soft skills” or nontechnical skills.
“Instead of manufacturing, I think the exports of services is in fact the strength of the Philippines, that the country should focus on developing rather than chasing after manufacturing like all other Southeast Asian countries,” Lam said in her presentation during the 23rd MAP International CEO Conference held on Tuesday.
Lam said that foreign direct investment is often associated with manufacturing. “Everyone wants to get a piece of the global supply chain. Everyone wants to be a supplier to Apple,” she said.
But while manufacturing remains one of the vital sectors of the economy, Lam said the Philippines has already found its “uniqueness” and “comparative advantage” in its skilled workers to emerge as one of the major global players.
“I think it’s important that the Philippines does not lose this and instead focus on developing this in this new trade dynamics, new paradigm that you provide something new and you improve your offerings in terms of BPO (business process outsourcing), exports of services,” she added.
Management Association of the Philippines (MAP) president Alfredo Panlilio, however, said the country should still focus on boosting the manufacturing sector to bring in multibillion-dollar investments investments in the long run.
“Manufacturing, to me, I don’t completely agree that you shouldn’t focus on it. I think we should try to have companies invest because when you say manufacturing, they invest in the country and once they invest billions in the country, it’s long-term,” Panlilio said in an interview.
Panlilio also said technological advancement somewhat poses threat to services, specifically those that can lower business expenditures.
“Services, yes, we need to continue to upscale. But there are threats. Technology has threats or if somebody says, ‘I can charge cheaper,’ then it’s easy to move people. Let’s also look at the threat from a purely services point of view,” he told reporters.
Data from the Philippine Statistics Authority showed that services had grown by 6.9 percent in the second quarter of 2025, relatively unchanged from a year ago.
The industry sector exhibited a 2.1 percent growth year-on-year, with manufacturing as the top contributor to the growth with 2.7-percent expansion.
