A second chance at industrialization
Until the early 1980s, Filipino engineers, accountants, and executives held senior positions in many Association of Southeast Asian Nations companies. That was long before millions of Filipinos left to work overseas, in jobs below their qualifications. We once exported expertise before we exported workers.
I began my professional career more than five decades ago when Philippine manufacturing was still competitive. Over the past few months, I have written about energy, manufacturing, infrastructure, and governance. This capstone brings those themes together because they all lead to the same conclusion: industrialization remains the country’s defining economic challenge.
It will determine whether we create wealth by producing goods or continue relying on what others make. One lesson stands out. Prosperous nations built productive industries before they became prosperous. Investments in skills, infrastructure, finance, technology, and institutions followed that national objective. They did not happen by accident.
After World War II, the Philippines ranked among Asia’s industrial leaders. We manufactured electronics, appliances, machinery, processed food, and many basic products. We then lost momentum. Manufacturing weakened, infrastructure failed to keep pace, electricity became increasingly expensive, and investment shifted from production to real estate, trade, and consumption.
During those same years, China, South Korea, Singapore, Malaysia, Thailand, and recently, Vietnam steadily moved ahead. Their paths were not identical, but they shared one characteristic: long-term commitment. They identified priority industries, invested in needed capabilities, embraced technology, and competed in world markets.
These countries formerly sent engineers and professionals to the Philippines for training. They visited our petrochemical, shipbuilding, steelmaking, and semiconductor industries. Their executives and future business leaders enrolled at the Asian Institute of Management, then widely regarded as among Asia’s leading management schools, while others pursued specialized studies and research at Philippine universities.
Today, they rank among the world’s leading manufacturing economies. Our shortcoming was never talent. It was our inability to sustain sound policies long enough to produce lasting results.
The timing could not be better. Companies are diversifying supply chains, artificial intelligence (AI) is transforming manufacturing, and the clean energy transition is creating entirely new industries.
The Philippines starts with important strengths: a young English-speaking population, world-class professionals, abundant indigenous energy resources, strategic mineral deposits, and a large domestic market that can support new industries before they compete globally.
We should strengthen industries where we already have solid foundations: semiconductors, electronics, business services, food processing, aerospace components, and medical devices, while building new capabilities in renewable energy equipment, energy storage systems, critical minerals processing, e-waste recycling, AI-enabled manufacturing, precision engineering, pharmaceuticals, defense industries, modern agribusiness, and digital technologies.
However, that vision will remain out of reach as long as electricity is expensive and unreliable. Affordable, secure energy is one of the foundations of industrial competitiveness. Developing our geothermal, hydro, solar, wind, and other indigenous resources should be viewed not only as energy policy but as a long-term economic strategy.
Government cannot do this alone. Neither can business, schools, or civil society acting independently. Industrialization demands a shared commitment that survives changes in political leadership. We have talked about our potential for decades. Potential, however, has never built a factory, created an export industry, or lifted families out of poverty. Only sustained execution does.
The World Bank’s recent reclassification of the Philippines as an upper-middle-income economy is an important milestone, but it is not the finish line. Reaching high-income status will require a strong industrial base that creates productive jobs, raises incomes, and expands exports.
Our neighbors proved that industrial transformation can be achieved within a generation. There is no reason the Philippines cannot do the same. The real measure of success will be when the next generation exports more world-class products than workers. If we finally stay the course, the Philippines can reclaim its place among Asia’s leading industrial economies.
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Pete H. Maniego Jr. is the current president of the Justice Reform Initiative, and former chair of the National Renewable Energy Board, Institute of Corporate Directors, University of the Philippines Engineering Research and Development Foundation, and Energy Lawyers Association of the Philippines.
