By Mariel Alison L. Aguinaldo
“I cannot, in any way, speak with certainty about the next twelve to eighteen months. In fact, I’m amused at how economists, no matter how sophisticated their tools are, are literally guessing about what’s going to happen,” said Bernardo M. Villegas, economist and professor at the University of Asia and the Pacific, during the recent Asia CEO Forum.
That being said, he predicts that four sunrise industries will remain strong, if not experience a boost, during the pandemic: agribusiness, digital technology, health-and-wellness, and skills development.
Food and agribusiness have been performing steadily, with the International Labor Organization reporting that food supply has been adequate since the beginning of the pandemic. In the Philippines, Century Pacific Food, Inc. reported an increase in net revenue during this time.
The Department of Agriculture expects the industry to be an integral part of the Philippines’ socioeconomic response to recovery efforts. Recently, the agency announced that it will explore the use of data-driven methods to help improve farm productivity. This includes the use of drones and a dynamic cropping calendar that provides real-time access to production and risk damage assessment data.
“This pandemic has finally impressed on the minds of everyone that food security is a must, and that we have to do something about the whole value chain of agribusiness,” said Mr. Villegas.
Demands from the digital technology industry will also increase as remote work and social distancing become the new norms. “Zoom has become one the most precious assets right now in the stock market,” said Mr. Villegas.
Other “sunrise” industries include health-and-wellness, and skills development. The latter includes both degree-granting institutions and informal education platforms. “People now see how important it is to make learning a lifelong process. Technology is changing so fast, you become obsolete the moment you graduate from any course,” said Mr. Villegas.
Infrastructure projects under the government’s Build Build Build Program (BBB Program) will also contribute to economic recovery. Dr. Villegas identified projects outside of Metro Manila as particularly helpful since they distribute economic opportunities.
These projects are also more attractive to investors since they are in less congested areas. Meanwhile, those located in export processing zones will also benefit from relaxed trade policies.
The lockdown initially slowed down the BBB Program, although flagship infrastructure projects like the Harbor Link were granted exemptions in May. Other projects, such as Clark International Airport, resumed in July.
If the government wishes to attract more investors, Mr. Villegas believes that it must ease foreign investment regulations. “I don’t have any illusion that we’ll be able to change the constitution in the remaining years of Duterte, but I’m optimistic that in the next administration… there will be enough demand for changes that we may be able to change those restrictions,” he said.
The constitution does not allow for more than 40% foreign ownership of any public utility, corporation, or association in the country. However, the House of Representatives approved a bill in March allowing for 100% foreign ownership in the power, transport, and communication sectors. Those in favor said that this would encourage foreign investment in the country.