Prior to joining PIDS, Dr. Rafaelita Aldaba was Team Leader of the Asia Regional Integration Center-Asian Development Bank from 2008-2009. She obtained her PhD in Economics from the University of the Philippines and completed Advanced Studies in International Economic Policy Research at the Kiel Institute of World Economics in Germany and was awarded academic scholarships from Germany's Konrad Adenauer Foundation, Germany Academic Exchange Program, AusAid, and UPSE's Gerardo Sicat Fellowship. Dr. Aldaba has conducted extensive research on the impact of government policies and free trade agreements on the competitiveness of the Philippine automotive industry.
Dr. Aldaba, who is currently conducting a research study on competitiveness, presented nothing less than a comprehensive historical situationer on the country's automotive industry to address the topic "Global and Country Perspectives on Competitiveness: What is the right development path for the automotive industry?" She underscored three main areas for change: government policies, performance and competitiveness, and industry response to rising globalization and economic integration.
Highlighted was the fact that the Philippines is a relative late comer as far as trade liberalization is concerned, compared to its other ASEAN neighbors, like Thailand. Consequently, the automotive industry has been suffering from a lack of economies of scale, the smallness of the domestic market, and the smuggling of vehicles. To attract new investment players, Government is pressed to carefully plan and manage the transition from the old protectionist policies to a more open, business-friendly environment.
In the succeeding discussion, Dr. Aldaba recommended the formulation of coherent and coordinated policies to avoid policy reversals, the crafting of temporary adjustment schemes, the rationalization of operations, and more focused policies and programs. "Traditional measures may no longer work," she emphasized, adding that she could not downplay the need to avoid tariffs to protect the automotive industry and put an end to smuggling.
As a counterpoint to Dr. Aldaba's thoughts on the discussion topic, fellow panelists Mr. Jesse Ang, Country Head, IFC/World Bank, Atty. Ann Claire Credo-Cabochan, Director of the Bureau of International Trade Relations of the Department of Trade and Industry, and Atty. Lai-Lynn Barcenas, Associate Director, Asian Institute for Management (AIM) Policy Center shared the following recommendations to make the Philippines a fitter player in the competitiveness game: adapt lower external tariffs, give a big boost to power, and road infrastructure. Mr. Ang was particularly emphatic about modifying bank loan schemes to favor small-to-medium-scale enterprises (SMEs) that form part of the auto industry, like local suppliers of assembled parts. Banks still tend to give greater premium to real estate as collateral, while such SMEs are not in the position to offer such. It is high time to adapt different strategies and newer types of support to cruise along the lane of competitiveness.
The second part of the discussion, "Consumer Trends and Competitiveness: What do consumers gain from a more competitive automotive industry," had Ms. Ma. Teresa Villanueva, Presidence/CEO of Publicis, rallying participants to focus on consumer behavior, emphasizing that the consumer is King when it comes to making important business decisions.
Ms. Villanueva, President and CEO of world-class advertising agency, Publicis-Manila, is the brains behind countless commercial brands that have successfully captured the hearts and minds of Filipino consumers. She has been with the advertising industry for over 20 years and worked closely with hundreds of accounts to craft dynamic campaigns for such international brands as Nestle Philippines and L'Oreal.
Ms. Villanueva made no bones about the realities of current consumer behavior. The market has become fragmented as people gain increased access to information. Thus, the consumer today has become more selective of which products fit one's lifestyle best. Another important reality is that the race for innovation is based more on appealing to the emotions rather than the intellect of one's market. Thus one buys luxury brands, for instance, because these make the buyer "feel" or "look" good. Ms. Villanueva also encouraged more consumer feedback, as Filipinos tend not to complain, but simply drop or "bad-mouth" a product.
This experience of a long-time player in the advertising world provoked interesting discussion among fellow panelists, Ms. Zenaida Maglaya, Undersecretary of the Department of Trade and Industry, Ms. Fe Perez-Agudo, President and CEO of Hyundai Asia Resources, Inc. (HARI), and Mr. Ryan Patrick Evangelista, Senior Deputy Secretary General of the Philippine Chamber of Commerce, Inc. (PCCI), who came up with the following conclusions: consumer welfare policies ought to be reviewed and geared to quality, the lowest possible pricing, and the promotion of fairness among market players in giving the public the best products possible. The middle class is turning increasingly discriminating and vocal about giving feedback on the products they use. There is a need to form more active consumer groups, while government needs to grant private businesses a more prominent voice in drawing new policies that affect their particular industries. Thus, healthy competition on a level playing field paves the way for true consumer welfare.