I would only beg to differ on a few points:

The first is that in 1997, you say that the contribution or value add of Philippine producers were quite minimal. However, nowadays, I would dare say that the picture is different as evidenced by the export to import ratios. I appreciate the anecdotal evidence you provide, but the numbers simply paint a different picture. Perhaps this is the subject for further investigation.

The second has to do with the “abuse” of the OJT’s being paid less than the going wage. Such an arrangement of course is not without precedent elsewhere. Paid apprenticeships and traineeships in Australia are subject to a contract of training which could go for as long as 3 years for example. My position is that better for our workers to gain such work experience and skills in a workplace that has better occupational health and safety practices than for them to be working in the sweatshops or informal sector where wages are much lower.

Finally there is the competition from China where wage pressures have been felt, a sign that their industrial capacity is reaching its limits as well. As China’s per capita GDP overtakes many Asian countries, including the Philippines, its cost advantage will erode. The Philippines will have to compete with other up and coming players in the region. There is certainly no time to rest on our laurels.

These over 700 firms are the so called contributors of the billion dollars revenue for the Philippines. Foreign owned companies(75%) contributed mostly by providing jobs to the Filipino workers. Direct and indirect materials are also mostly foreign including sub-assemblies.Local companies (25%) contributed via employment and the supposed to be value added component. This value added component means the use of materials produced in the Philippines both direct and indirect, use of local consultants, etc. in other words, Filipino made quality inputs to the production processes.

Having been employed in the Electronics Industry for 23 long years i have observed and experienced the ins and outs of this sector.

Technology exporter is a misconception, when it is being referred to the Philippines dealing with research and development. Local electronics subcontractors are just following the production specifications being provided by their customers both local and foreign. If the meaning is producing high technology devices, yes the Philippines is considered one of the best if not the best country to contract with because of inherent skills and dexterity of Filipino workers.

In 1997 i made a study on the contribution of Manufacturing sector in the industrialization of CALABARZON and conclude for the minimal productivity contribution of such an effort. Workers particularly in the government economic zones including electronics companies are receiving subsistence wages and salary which fairly improve their purchasing power that will boost the community economic development.

Today contractualization is very rampant and many companies are abusing OJT which pay only 75%% of the minimum wage. There are Japanese companies also that send employees in Japan for training on complicated processes but actually using this avenue to economize further their production cost.

Government industrial policies need to be strengthened and reformed to protect workers. We should go out from the previous pronouncement of a country with cheap labor. Local companies, IMI an Ayala company and IONICS had already transferred some of their facilities in China because of cheap labor. We need to design and incorporate more value added processes in our assembly and production. The government should look into providing incentives and more support for Filipino investors that will focus on vertical integration and fast tract research and development that will boost further the Electronics Industry sector using our very owned skilled manpower and Filipino suppliers, This is the essence of Philippine economic development.

Thanks for giving me the opportunity to provide comments. More power!

This particular transplant heartily agree with this particular observation.

Indeed, there is no box, and it is good to have Mr. Santos about reminding us of that in pragmatic terms.

I welcome anyone to (in the words of Sarah Palin) “refudiate” my claims. Just follow the links in the article which will lead you to the National Statistics Office figures for exports and imports.

Mabuhay tayong lahat!

Mabuhay ang Pilipinas!

As far as the foregone taxes are concerned, you are absolutely right on the money, which is why I welcomed the pronouncements of trade and finance officials to rationalize fiscal incentives. It is long overdue. Many of these are redundant and unnecessary. The consensus is forming from academics, business and government that major streamlining is needed to arrest the erosion of our tax base.

Finally, as far as the “lack of community involvement” is concerned, don’t the people who work in the EPZAs live in the community? eat and shop there? send their kids to school, engage in tourism, buy cars or use public transport? attend weddings, birthdays, etc.. etc… Wouldn’t it still be preferable to have them live and work there than to lose these out to Vietnam or Malaysia? You might have failed to consider these economic and social impacts in your haste to dismiss them as a “drain”.

They are almost like artificial implants. These factories may as well be foreign embassies. Worse, a lot of these outfits were given perks in the form of tax holidays and other subsidies.

Those foregone taxes and the costs of these subsidies are, to be fair, the price our society is paying for the lack of any inherent ability in Da Pinoy to create capital indigenously.

Consider how diversified the products we are currently making. From 3G handsets, flat screen TVs, GPS devices and hybrid car equipment, iPods, scanners and others. These are spillovers from previous investments made in other areas like CD ROMs and computer chips. Most of the companies supplying to the big multinationals are Filipino owned based on their industry body, SEIPI’s, statistics. Clearly there is some technology transfer going on.

What about the thousands of managers, engineers and skilled workers employed in this sector who are paid a decent living wage and have good working conditions? Surely there are benefits that accrue to them and their families.

Against this evidence, can we still mount the argument you have made (which I suspect is not really yours, but borrowed from elsewhere)?