Business and Economy
Preparing for the future: what the Philippines can learn from Canada
The economy of The Philippines continues to grow, while Canada is facing a potentially wobbly 2019 as it reaches the end of its current cycle of growth. Still, there’s a lot that The Philippines can learn from the latter’s more advanced economy as we move towards the third decade of the 21st century.
Threats to Canada come in the form of international forces – “There are always reflections around the cyclical downturns that happen and, as I’ve said, the impacts of a trade war between China and the United States could have significant impacts on the global economy — negative impacts on the global economy,” Prime Minister Justin Trudeau said in a recent interview with The Canadian Press.
Meanwhile, in the grander sweep of the next two decades, the Philippine economy will likely outgrow Turkey, Poland, Thailand, UAE, Egypt, Colombia, South Africa, Argentina, Czech Republic, Angola, Morocco and Kenya according to Capital Economics.
Still, the Philippine economy still remains dependent on state-funded infrastructure projects to drive growth while the government focuses on law and order projects over economic policy concerns.
Canada, meanwhile, continues to invest in future-facing sectors and industries to create an economic engine that will drive Canada into the future. Here are some industries on the rise in Canada that The Philippines could benefit from emulating.
Advanced Manufacturing
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A significant 10 per cent of Canada’s GDP comes from the country’s manufacturing sector, and that sector is set to grow further if it can capitalise on growth in machine learning and embrace the so-called ‘fourth industrial revolution’. The Canadian federal and provincial governments are supporting advanced manufacturing through various programs and R & D initiatives.
Manufacturing in the Philippines remains underdeveloped, however. The cost of energy remains high, smuggling is an ongoing problem, the existing infrastructure is inefficient and the country has a lack of foreign direct investment, particularly those that impact new technologies. If The Philippines can improve in these areas, it could future-proof its manufacturing industries.
Cleantech
As global warming garners more and more headlines, the global cleantech industry is ready to skyrocket. Cleantech is any service or product that reduces environmental harm, and the Ontario government predicts that “the global market for clean technology is expected to grow to a size of $2.5 trillion by 2022”.
Canada remains a big investor in both the technology and the sector. The country has a vast network of hydroelectric power generators and a fast-growing solar industry. The federal government included $700 million of investment in clean technology in its budget last year, a clear sign that it intends to continue supporting the sector.
Historically, The Philippines has been relatively strong on green technology. In 2011 it launched its Philippines National Renewable Energy Program and in 2012 it followed up with the first Philippine BioEnergy Conference. If it can pick up some of that pace it can join Canada as one of the foremost homes of cleantech.
The gambling industry
The gambling industry is on the rise in Canada. In 2017 it grew 4.9 per cent and generated an impressive CA$17.3 billion from a mix of bricks and mortar casinos, lotteries and online gambling. Several provinces accounted for upwards of $3 billion single-handedly.
In the past, provinces like Alberta have been able to capture 25% of the online gambling market, although they are under pressure from offshore online casinos who can offer players a big range of exciting casino games, among other benefits. An offshore online casino often has more visitors, this enables them to offer the players better odds and more enticing promotions.
The Canadian Gaming Association states that gambling is the largest sector of Canada’s entertainment industry and directly supports more than 135,000 jobs. Beyond that, it says that the industry “generates almost $9 billion annually to fund government and community programs and services”. If The Philippines follows Canada’s lead, gambling could be both a major source of tax revenue and a huge stimulator of job growth.
Video Games Development and Publishing
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The video games industry is now a global entertainment powerhouse that’s often said to eclipse film in terms of market size and revenue. Encompassing everything from AAA multi-million dollar titles such as FIFA and Red Dead Redemption through to small mobile indie games such as Monument Valley, it’s predicted to be worth $180.1 billion by 2021.
In Canada, the games industry contributed $3.7 billion to GDP in 2017, a 24 per cent increase from 2015 that created 40,600 direct and indirect jobs. Big budget AAA development is a big part of the sector in Canada. It’s home to studios such as Ubisoft Montreal (development lead on many of Ubisoft’s biggest projects, such as Assassin’s Creed), BioWare (the studio behind Mass Effect and the forthcoming Anthem) and EA Vancouver (the team behind the likes of FIFA).
Games development also has a solid presence in the Philippines, with the country housing studios including Anino Entertainment, Anino Mobile, Flipside Games, Glyph Studios, Matahari Studios, PixelStream and Secret Six. The Game Developers Association of the Philippines hopes to eventually capture one per cent of the global market, which would turn it into a multibillion dollar domestic industry. Following in the footsteps of Canada by moving into the AAA space could help The Philippines reach that next level.
AI and Machine Learning
Artificial intelligence and machine learning are widely expected to be the dominant forces in the global economy over the next few decades. In Canada, the industry is small but growing rapidly. It was given a shot in the arm in 2017 when the federal government pledged $125 million to bolster the sector in its Pan Canadian Artificial Intelligence Strategy. Software engineers specializing in machine learning are in increasing demand, and that’s only likely to grow over the coming years. The technology is expected to disrupt a wide array of other industries, including finance, law and healthcare.
In the Philippines companies have already begun incorporating the tech into their offerings, and the country would do well to stay ahead of the trend and bolster companies moving into the field.
While the economy of The Philippines is definitely on the right trajectory, it could strongly benefit from following the lead of Western countries such as Canada in modernizing and future-proofing its industries. Sectors such as advanced manufacturing, games development, clean technology, online gambling and artificial intelligence present a way forward that will assure the country’s place in the 21st century.
