ECONOMISTS flagged the declining employment share of the Philippine manufacturing sector, which they said is key to achieving a high-income status and meeting other development goals including bringing down poverty incidence to single digits at a faster rate.

A De La Salle University (DLSU) School of Economics report on Monday showed that most targets under the Philippines’ development plan for 2023 to 2028 will be met later than expected, and noted that the country would struggle to achieve high growth in the long-run in the absence of an industrial policy that has helped its Southeast Asian neighbors’ manufacturing industries climb the value chain.

Most Filipino workers are employed in sectors of “very low productivity,” the report said, adding the manufacturing sector’s employment share is only 8% and is expected to further decrease to 7% by 2030.

“Historically, countries that have achieved high-income status obtained employment shares in manufacturing from about 20-25%, sometimes even higher,” Mariel Monica Sauler, an economics professor at DLSU, said at the report’s launch in Makati City. “Our current manufacturing employment share is just 8%.”

For the Philippines to become an economic powerhouse, it needs to restructure its economy by taking workers out of the agriculture sector through mechanization and by significantly increasing the employment share of its manufacturing base, said Jesus Felipe, director of the Angelo King Institute for Economic and Business Studies at DLSU.

“We desperately need firms with high organizational capabilities and highly productive, that manufacture and export complex products, and that compete in the world economy,” he said during the event.

Mr. Felipe said the declining number of Filipinos leaving the country for job opportunities abroad — a phenomenon linked to an increase in wage rates locally — provides an opportunity for the country to expand its manufacturing base.

According to the report, the number of overseas Filipino workers (OFWs) will further decline to 1.91 million in 2025 from 1.97 million in 2023.

“We think that our wage rates are going to increase.

Therefore, the incentive to leave the country declines,” Mr. Felipe said.

Even as the agriculture sector’s employment share has been on a decline, Ms. Sauler said the share of construction and transport and storage sectors, which have “low productivity” and “low wages,” have increased.

Source: Business world

The Indonesian government is implementing strategic initiatives to establish family offices, private entities aimed at managing the business affairs of affluent families. This move will enable ultra-high-net-worth individuals from various countries to make investments without incurring tax liabilities.

Indonesian President Joko Widodo has directed the formation of a special team under the leadership of Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan, involving some ministries and the World Bank, to assess the family office investment scheme and prepare the necessary regulations and infrastructure.

“Some foreign investors have already shown initial interest as the first registrants. We will provide more detailed information in the next two or three weeks,” Luhut said on Friday.

The family office is set to be located in Bali, an island resort that draws tourists from around the world, as well as in Nusantara, the country’s new capital.

About 11 trillion U.S. dollars of global financial assets are presently invested outside their native economies, said Luhut, adding that this amount is expected to rise. The United Arab Emirates, Singapore and China’s Hong Kong are the main locations for these funds.

Luhut referenced The Wealth Report, which projects that the number of ultra-high-net-worth persons in Asia will rise by 38.34 percent between 2023 and 2028, with a 34 percent increase predicted for Indonesia.

He also emphasized how the United Arab Emirates, with more than 400 family offices in Dubai handling trillions of dollars, was a pioneer in the establishment of wealth management centres.

“Indonesia, with its strong economic growth, vast investment prospects, and neutral geopolitical policies, has the opportunity to attract foreign investment and become an alternative destination for capital placement,” he said.

In addition to benefiting ultra-high-net-worth individuals, investment funds will be used for domestic projects, thereby boosting national economic growth. Jobs are expected to become more available as domestic capital circulation increases, helping boost local consumption and increase the gross domestic product, Luhut added.

Source: Xinhua