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THE finding should raise some eyebrows and some pride.
Newsweek (June 23, 2003) quotes a World Bank study on export opportunities to China. The
research says that South Korea's advantage lies in low-tech exports like steel, Japan's is
in mid-tech machinery, and "biggest surprise of all, the Philippines' are in high
tech."
Actually made in RP
The piece further quotes Jaffy Jurado, technical officer with the Semiconductor and
Electronic Industries trade association of the Philippines.
"Not a lot of people know this, but we make a lot of the basic building blocks that
go into remote controls, phones, watches, and other things that are made in China,"
says Jurado.
What's going on? Different reports echo the same conclusion: the Philippines is becoming
the place to be for hi-tech manufacturing. Investments in the information and
communication technology (ICT) sector rose by 240 percent in the first quarter of 2003.
Deep manpower pool
Behind the trend is a rich human resource base for information technology jobs.
The Philippines has a 94-percent literacy rate and a large pool of college students. It
also has the edge in English proficiency, being the 3rd largest English speaking nation in
the world. In Asia, the country's supply of IT workers is second only to that of
India--which has a population of one billion.
Research firm the Meta Group ranked the Philippines No. 1 in the world in terms of
knowledge workers. Its Cyber Atlas of 2000 put the Philippines ahead of 47 other
countries, including the United States, Australia, France, Canada, and India.
From coconuts to computer parts
The Philippines is among just a handful of nations that have enacted a sweeping Electronic
Commerce Act. The government is now pushing the full computerization of its operations.
For example, procurement will soon be done electronically.
These advantages make the Philippines more competitive in the ICT scene.
Filipino workers are moving up the value chain in electronics. Twenty years ago Filipinos
in export processing zones did menial jobs, plugging the right chips into the right holes.
The value-added then was only 5-8 percent. Today the ratio has shot up to some 30 percent,
with local design, testing, and manufacturing.
Just decades ago, the top Philippine exports were coconut chips. Now they are computer
chips. Microelectronics account for even up to 75 percent of the nation's export revenues.
Pentium IV
Amazing but true: 30 percent of Intel's global revenue comes from products manufactured in
the Philippines. Further, the most advanced Intel technology will come to the company's
factories in the Philippines, according to the firm's president.
Many computers use the Pentium IV chip manufactured by Intel corporation. Around the
globe, there are only three Intel factories that make the Pentium IV chip--and one of them
is found in the Philippines.
Craig Barrett, chair of Intel has said, "We've been here 23 years, we've been through
earthquakes, volcano eruptions, coup d'?etats, changes in environment, but our product
gets shipped in the right quality, and on time."
Toshiba is another example. The electronics giant has shut down its laptop manufacturing
factories in the United States and has moved them to the Philippines. There is much
confidence in the quality of the products. In fact, the laptops made here go directly to
their distributors without passing through quality control in the States.
Cell phone chips
The cell phone is very common in the country, and each unit contains a DSP (digital signal
processor) chip, which converts sound into digital signals. In 2001 Nokia sold 150 million
cell phones to the world market. Each of these units contains a DSP chip made by Texas
Instruments in Baguio.
"We are very bullish about the industry primarily because of the success of the
wireless gadgets," says Norberto Viera, president of the Philippine unit of Texas
Instruments. His company produces 95 percent of all the DSP chips for Nokia.
"As a matter of fact, the demand for these products is so hot that in our factory
back in Baguio we are running at full capacity" says Viera. He adds that their
turnover for 2003 should rise to at least 2.3 billion dollars.
That equals the total exports for the garments industry, the nation's second largest
export category.
A little more time, global marketing and local faith should power the Philippines to
charge through the world highway of high technology.
Comments to darroyo@philonline.com
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