PIDS urges gov’t to expand manufacturing industry

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MANILA – Through the implementation of reforms that will facilitate the labor-extensive manufacturing expansion, the Philippine Institute Development Studies said, it might be possible for the government to create more jobs.

PIDS emphasized in a study entitled “Labor Policy Ananlysis For Jobs Expansion and Development,” that there is a growing need to enhance labor-intensive production especially in the field of manufacturing tradable goods.

The study also gave emphasis on the key drivers of minimum wages including relative food price.

“These objectives require inter alia minimum wage reform, which should be undertaken immediately, while investors are looking for new places to locate labor-intensive production and the Philippine economy is getting another look as a potential destination,” it said.

Meanwhile, the study also suggests the need for the implementation of reforms which goes beyond the mandate of the Department of Employment.

“Facilitation means not just moderating minimum wage mandates and other restrictive labor regulations, but also pushing reforms that go beyond the responsibility of the Department of Labor and Employment,” the study said.

“These reforms should effectively deal with critical binding constraints and counterproductive policies, including infrastructure underdevelopment, elevated cost of subsistence due to rice import policy, high cost of doing business, high energy cost, weak enforcement of contracts and protection of property rights, and confusing laws.”

It also added that the country will benefit by looking at industries advanced countries are becoming less competitive in.

“These are labor-intensive industries that employ millions of workers. The Philippines can choose those industries that are suitable to its superabundant labor endowments and in which China and other more advanced countries do not have a leg up over the Philippines,” the study added.