38th Joint Meeting of the Philippines-Japan
Economic Cooperation Committees
“Promoting Philippines-Japan Business
through Innovation and Digitalization”
SECRETARY RAMON M. LOPEZ
Department of Trade and Industry - Philippines
27 September 2021
The PH-JP Bilateral Trade Relations
9.88
10.91 10.81 10.57
8.61
6.08
11.67
10.85 10.32
10.67 10.03
6.20
-
2.00
4.00
6.00
8.00
10.00
12.00
14.00
-
12.00
2016 2017 2018 2019 2020 2021(Jan-Jul)
Imports Exports
PH-JP Bilateral Trade in Goods Performance
2016 -2020 (USD Billion)
2020 PH-JP Trade in Goods
Key Performing Commodities
Commodity Value (USD Thousands)
Digital Monolithic Integrated Circuits 980,685
Ignition Wiring Sets And Other Wiring Sets 920,049
Bananas, Including Plantains 714,517
Other Vessels For The Transport Of Goods And Other
Vessels545,033
Nickel Oxide Sinters And Other Intermediate Products 401,991
Source: Tradelines Philippines
Exports of Goods
Commodity Value (USD Thousands)
Digital Monolithic Integrated Circuits 571,164
Materials, Accessories And Supplies For Electrical
And Electronic Machinery, Equipment And Parts498,660
Parts And Accessories Of The Machines Of Automatic
Data Processing Machines (84.71)487,498
Other Materials, Accessories And Supplies For
Semiconductor Devices279,661
Other Digital Monolithic Integrated Circuits, N.E.S. 257,003
Imports of Goods
The Philippines and Japan continues to maintain a strong trade engagement amidst the pandemic reporting
US$ 18.65 Billion in Total Trade Value; which makes Japan the 2nd biggest trade partner of the Philippines.
-Agriculture, Forestry, and Fishing (-0.1%)
Manufacturing (22.3%)
Services (9.6%)
Industry (20.8%)
Gross Domestic Product …
-30.0
-20.0
-10.0
0.0
10.0
20.0
30.0
Gro
wth
Rate
s (
%)
Philippines is now showing signs of economic recoverySince the gradual reopening of the economy in 2020Q3, the picking up of business & consumer confidence, and the
optimism in vaccine roll-out, 2021Q2 is now showing signs of gradual recovery.
2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2
Agriculture, Forestry, and
Fishing 0.5 0.7 3.0 0.8 -0.3 1.6 1.2 -2.5 -1.3 -0.1
Industry 5.0 3.6 6.0 7.1 -2.5 -21.8 -17.6 -10.6 -4.4 20.8
Manufacturing 5.0 2.7 1.4 5.6 -3.3 -21.2 -10.4 -4.9 0.5 22.3
Services 7.3 7.4 6.9 7.4 0.1 -17.1 -10.6 -8.0 -4.1 9.6
Gross Domestic Product 5.9 5.6 6.3 6.6 -0.7 -17.0 -11.6 -8.3 -3.9 11.8
Innovation in the Philippines remained resilient despite COVID-19 setbacks
GII: Philippines continues to perform above expectations for its level of development
5054
737374
83100
2020201920182017201620152014
51
2021
2021 Global Innovation Index Rankings
• Philippines is considered an
”innovation achiever” for 3rd year
Indicator Global Rank
High-tech imports, % total trade 1
High-tech exports, % total trade 1
Firms offering formal training, % 8
Utility models by origin/bn PPP$ GDP 8
Creative goods exports, % of total trade 10
ICT Services exports, % of total trade 13
Graduates in science and engineering, % 19
GDP/unit of energy use 21
Applied tariff rate, weighted avg., % 22
Domestic market scale, bn PPP$ 27
Philippines Strengths:
E-commerce adoption in the Philippines has also grown
from 70% in 2019 to 76% in 2020 and 80.2% in 2021.
Embrace Industry 4.0
Upskill/Reskill Workforce
Integrate Production Systems
Ease Of Doing Business
Innovative SMEs & Startups
Innovation & Entrepreneurship Ecosystem
• Use and adapt new technologies
• Simplification of processes, automation
• Power, logistics, infrastructure
• Upgrade education curricula
• Skills training programs
• Improve digital skills
• Prepare SMEs for Industry 4.0
• Build startup ecosystem
• Link manufacturing with agriculture & services
• Participation in global value chains
• Promote research commercialization
• Creation of new products, services, business models
Inclusive Innovation Industrial Strategy (i3S)
Priority Industries for Domestic and Export Markets
Auto & Auto Parts Chemicals Agribusiness Furniture, Garments Creative Iron & Steel,
Tool & DieElectronics &
Electrical
Shipbuilding &
Shiprepair
Aerospace &
Aircraft MaintenanceConstruction Transport, Logistics TourismIT-BPM
E-Commerce
Digital Economy
Climate Change,
Mobility Solutions
Considering Global Value Chain Participation, Missing Markets, Employment, Innovation and R&D, Regional Development, Linkages, Poverty
Reduction, Spillovers
Vehicle Technology –
connected car technology
Resilient Technology
Audio, Video, Edtech
Smart
Assistants
E-gaming
Digital Health
Smart Buildings &
Smart Home Technology
A vision for
the FUTURE
Creating new products or solutions with technology building blocks
Voice Recognition, AI, AR, robotics, 5G connectivity, and IoT
#1ROBOTICS
ENGINEER
CYBERSECURITY
SPECIALIST#2
CUSTOMER
SUCCESS
SPECIALIST
#3
DATA
SCIENTIST#4
SALES
DEVELOPMENT
REPRESENTATIVE
#5
FULL STACK
ENGINEER#6
DEV-OPS
ENGINEER#7
DATA
ENGINEER#8
JAVA SCRIPT
DEVELOPER#9
CLOUD
ENGINEER#10
Source: LinkedIn
Top Emerging Jobs in the Philippines
Engineering &
Technology
39%
IT Related
36%
Mathematics1%
Medicine & Health Related
20%Sciences4%
25.7
28
30
37
38
41
Opportunity to Upskill and Reskill our Young….
…and highly educated workforce
Source: Commission on Higher Education
Me
dia
n A
ge
790,000+ annual college graduates
200,000+ in the engineering, information
technology and medical-related fields
Industry 4.0 is already reshaping the
landscape of employment in the PhilippinesAI, Data Analytics, and AI-related jobs are on the rise
Source: DTI Survey on the Technology Utilization Status of Manufacturing Companies in the Philippines
77%
67%
microenterprises are
familiar with
Industry 4.0
small and
medium enterprises are
familiar with
Industry 4.0
83%
largeenterprises are
familiar with
Industry 4.0
Primary Considerations for Shifting to Industry 4.0
28%
Improvement in
Productivity and
Competitiveness
13%
Innovation and
Technology
Advancement
13%
Cost of
Investment &
Funding
10%
Market Conditions
7%
Others
29%
Not Considering/
Unfamiliar
Barriers to Industry 4.0 Transformation
#1
Lack of financial
capability
#2
Unfamiliar/Not
Considering
#3
Other Company
Reasons
#4
Market
Conditions
#5
Lack of Skills,
Knowledge, and
Expertise
#6
Poor Digital
Infrastructure
Internal Corporate Strategy, Prospective Loan Application,
In-House R&D, and Skills Development and Management Training are
the most common actions to overcome Industry 4.0 transformation barriers.
Industry. 4.0 Openness of Philippine Manufacturing Enterprises
Industry X.0
Information, Education, and Communication Firm Readiness Assessments
Roadmap Development
Simulation and Pilot Demonstration
Pursuing & Sustaining Industry 4.0
12
3
4
5
Host demonstrations, simulations and and case applications of Industry 4.0
technologies that enterprises, especially MSMEs, can access to determine actual
impact of recommended technologies in the roadmap
Industry 4.0 Pilot Factory & SME Academy
Outlining a clear roadmap towards Industry 4.0-ready factory based
from the SIRI assessment
Industry 4.0 Roadmaps
Industry 4.0 Workshops Introduce Industry 4.0 tools and concepts to government,
industry, and academe to achieve critical mass
Development of skills frameworks for
industries’ reskilling/upskilling path
Philippine Skills
Framework
Incentivize Industry 4.0 upgrading
activities through process innovation
CREATE Incentives
Smart Industry Readiness Index Assessments
(Digital Maturity Assessments)
With support from:
AI services to optimize production
National Center for
AI Research
DTI’s Industry 4.0 Approach: Awareness to AdoptionDTI provides support throughout the journey of Industry 4.0 transformation of manufacturing enterprises covering all facets of production: skills, financial support, and technology expertise Industry 4.0 Smart Factory
Industry 4.0 Workshops
Conducted Industy 4.0 Workshops to more than
200+ C-level company executives
of leading manufacturing firms in the Philippines to
introduce Industry 4.0 concepts and technologies and
discuss how these can be leveraged to future-proof their
factories.
Sectors: automotive, electronics, aerospace, chemicals,
food manufacturing, and the construction materials
sectors.
1. Assessment of the Industry 4.0-readiness of the
company’s production dimensions;
2. Benchmarking of the company’s current performance
compared to its local and international peers in the
industry which have also taken the SIRI Assessment;
3. Determination of the prioritized areas for improvement
based on their impact, viability, and alignment to the
company’s overall growth strategies.
Piloting 21 companies for 2021
Sectors supported: Food and Agri-business, Automotive, Electronics,
Textile/PPE, Chemicals
Smart Industry Readiness Index Assessment:
Sectoral
Information
Occupations/Job
Roles
Skills
Description
Career
Pathways
Training
Programmes
Launched in 2021, the PSF is a common reference or language that employers and
workers share in order to ensure the match between jobs and skills.
For Employers: Identify the must-have skills and competencies for
potential employees; Design HR and talent development plans
For Job-Seekers: Define ways forward or upward in a particular
industry by specifying the skills and competencies needed to be
acquired
For Educational Institutions: Use the skills framework to revise existing curricula or design new courses
Philippine Skills Framework (PSF) Initiative
The PSF Initiative was launched last 25 June
2021 through a Memorandum of Understanding
(MOU) among DTI, DA, DepEd, DICT, DOLE,
DOST, DOT, CHED, PRC, and TESDA.
Priority Sectors: construction, creatives, food (agriculture and fishery); health
and wellness; IT-BPM; logistics and supply chain; manufacturing; and tourism.
a
Government
Universities
Funders
Event
Meetups
R&D Labs,
S&T Parks
Co-Working
SpacesAccelerators/
Incubators/
Innovation Hub
Large, Small, Medium
Enterprises, Startups
Service
Providers
Support
Organization
REGIONAL INNOVATION &
ENTREPRENEURSHIP
ECOSYSTEM
REGION V – Legaspi
Pili
REGION VII – Cebu
Electronics
REGION X – Cagayan de Oro
(Processed Food) & lligan
REGION XI – Davao
Functional Food
REGION II
Cagayan
REGION III
Central Luzon
REGION IV-A
CALABARZON
REGION IX
Zamboanga
Building Regional Inclusive Innovation Centers (RIICs):Strong Government-Industry-Academe Collaboration
Networks of creative communities innovative and entrepreneurial Filipinos, who are driven by their desire
to do things better, provide solutions, make better products, and address market demands.
BRIDGE
BICOL
AI technologies can unlock $1 trillion to Southeast
Asia’s GDP; $92B to PH GDP.50+ tech startups in the Philippines are using AI
as a core technology in their business model
Indonesia
12% | $366 billion
Thailand
13% | $117 billion
Singapore
18% | $110 billion Malaysia
14% | $115 billion
Vietnam
12% | $109 billion
Philippines
12% | $92 billion
Economic impact of AI in 2030 (% of 2030 GDP)
Source: EDBI and Kearney (2020)
Applications cover a wide range of industries including
fintech, e-commerce, advertising, healthcare, and IoT
Specific objectives:
1. To maintain the regional and global competitiveness of local industries
noting that AI is one of the biggest drivers of innovation for enterprises.
2. To identify key areas (in both R&D and technology application) for
investing both time and resources of government, industry, and society.
3. To recommend ways for effectively fostering a triple-helix (Government-
Industry-Academe) R&D collaboration, essential to national development.
4. To suggest approaches for preparing the future workforce for the jobs of the
future.
5. To attract the biggest industries to set shop in the country, and thus
generating more jobs for the Filipino people.
Philippines as a Center of Excellence in Artificial Intelligence
National AI Strategy for the Philippines focuses on how AI can be used to uplift
he lives of our people, improve the productivity of our enterprises, and
enhance the competitiveness of our economy.
Focus Areas:
• Manufacturing | Services | Precision Agriculture | Construction | Finance/banking | Healthcare | Resilience Technology |
Smart Cities
National Center for AI Research (N-CAIR)Accelerating Innovation and MSME Digitalization with AI
The AI Center is a public-private partnership hub for data scientists and researchers to:
• Perform collaborative AI R&D and technology application among government agencies, researchers,
universities, research institutes, startups, and MNCs;
• Offer consultancy services and AI tech products to support digital transformation of local industries,
generate investments, and create employment;
• Conduct data literacy programs and develop learning modules to upskill and reskill the workforce;
• Attract leading global firms to set up R&D activities in the country.
• Export enterprise: export at least 70% of its total production or output
• Domestic market enterprise (DME): any enterprise registered with IPA other than export enterprise
• ITH: income tax holiday
• SCIT: special corporate income tax rate for export enterprise, tax rate of 5% GIE
• ED: enhanced deductions
YEARS OF INCENTIVES
EXPORT ACTIVITIES DOMESTIC MARKET ACTIVITIES
LOCATION TIER I TIER II TIER III TIER I TIER II TIER III
NCR
14(4 Years of ITH
and 10 Years of
ED/SCIT)
15(5 Years of ITH
and 10 Years of
ED/SCIT)
16(6 Years of ITH
and 10 Years of
ED/SCIT)
9(4 Years of ITH
and 5 Years of
ED)
10(5 Years of ITH
and 5 Years of
ED)
11(6 Years of ITH
and 5 Years of
ED)
METROPOLITAN AREAS AND AREAS
OUTSIDE OF AND CONTIGUOUS OR
ADJACENT TO NCR
15(5 Years of ITH
and 10 Years of
ED/SCIT)
16(6 Years of ITH
and 10 Years of
ED/SCIT)
17(7 Years of ITH
and 10 Years of
ED/SCIT)
10(5 Years of ITH
and 5 Years of
ED)
11(6 Years of ITH
and 5 Years of
ED)
12(7 Years of ITH
and 5 Years of
ED)
ALL OTHER AREAS
16(6 Years of ITH
and 10 Years of
ED/SCIT)
17(7 Years of ITH
and 10 Years of
ED/SCIT)
17(7 Years of ITH
and 10 Years of
ED/SCIT)
11(6 Years of ITH
and 5 Years of
ED)
12(7 Years of ITH
and 5 Years of
ED)
12(7 Years of ITH
and 5 Years of
ED)
Philippines’ fiscal incentive system is now innovation-drivenUp to 17 years of incentives for activities that are export-oriented, innovation-intensive, and located far from NCR
Stronger PH-JP Partnership in PJEPA and RCEP
PH remains committed in concluding the General Review of the PJEPA and that while both the Philippines
and Japan are parties to the RCEP and the AJCEP, the bilateral track still remains to be the best option
for parties to undertake further mutually beneficial commitments.
Japan Economic Partnership
Agreement (PJEPA)
PJEPA is a core element of the strategic
partnership between PH and JP, and has been
mutually beneficial throughout its 13-year
implementation.
One of the main objectives for the PJEPA
General Review is to improve market access for
some of the PH’s top agricultural and industrial
export products to Japan.
2nd 2020 Top Trading
Partner of the PH 5th 2020 Highest
Investment Source 1st 2020 Export Market and
PH Product Destination2nd 5th 1st