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Honorable Maria Cristina Roque, Secretary of the Department of Trade and Industry;
Representatives of various government agencies;
Representatives from private sector associations, think tanks, universities, and development partners;
Magandang Umaga! Good morning!
On behalf of the World Bank, it is a pleasure to welcome you to this timely and important gathering—the Philippine Industrial Policy Forum 2026.
I especially want to thank the Department of Trade and Industry for initiating this forum and for its sustained commitment to building an evidence-based industrial policy agenda for the Philippines. The World Bank is proud to support that effort as a partner.
Why are we here today? Why does this forum matter for the Philippines’ development ambition—and why now?
Over the past decade and a half, the Philippines has made real progress: broad-based growth, substantial poverty reduction, and millions of Filipinos moving into better jobs. The country’s strengths are clear: a young and dynamic workforce, a growing middle class, strong domestic demand, and expanding digital connectivity.
And yet the country is running uphill. Our recent Growth and Jobs Report shows that while growth has been strong, it has depended more on capital accumulation than on productivity gains.
Job creation has been concentrated in lower-productivity, non-tradable sectors. Leading firms have struggled to scale, while tradable sectors continue to face high costs, regulatory friction, and skills mismatches. Escaping the middle-income trap will require not just more growth, but smarter and more productive growth.
That is where industrial policy enters the picture.
Industrial policy has long been debated—here in the Philippines and around the world. For years, the argument was framed in ideological terms: should governments intervene or not, pick winners or remain neutral?
The World Bank’s view is pragmatic: the question is no longer whether to use industrial policy, but how to use it well.
As you will hear in the keynote presentation later today, our research points to three factors that shape a government’s industrial policy choices: domestic market size, technocratic capacity, and fiscal space. These factors influence which among a range of instruments—from industrial parks and training programs to tariffs, subsidies, and exchange-rate policy—which ones are likely to be most effective. Our recommendation is straightforward: all countries should think about industrial policy, but they should use the tools that fit their context.
When industrial policy is well targeted, time-bound, transparent, performance-based, and anchored in measurable objectives, it can be a powerful driver of productivity and structural transformation.
But when it is poorly designed, the risks are equally real. It can lean too heavily on broad fiscal incentives while leaving structural bottlenecks untouched. It can support activities without clear performance criteria or exit mechanisms. It can scatter resources across parallel programs. And in doing so, it can slow transformation while consuming scarce fiscal space.
Our analysis suggests that this tension is visible in the Philippines. There are many programs, a heavy reliance on tax incentives and special economic zones, and still too little investment in the foundational public goods that competitive firms need: skills, logistics, standards, digital infrastructure, and quality certification.
This brings me to what we want to accomplish today.
Today’s forum is not a debate about industrial policy in the abstract—we are beyond that. It is about the concrete choices in policy design and implementation that determine whether industrial policy delivers results. The questions before us are straightforward:
- How do we move from broad sector targeting to supporting the specific activities and capabilities where the Philippines can build real competitive advantage?
- What instruments—beyond fiscal incentives—should anchor the strategy: workforce development, quality infrastructure, logistics, data systems, or market intelligence?
- And how do we build the government capability to do this well—through disciplined, adaptive, and learning-based interventions?
These questions require the kind of grounded exchange that only a room like this—bringing together practitioners, analysts, and decision-makers—can produce.
Fragmentation is one of the greatest obstacles to effective industrial policy. When agencies pursue parallel programs with overlapping objectives and disconnected tools, impact is diluted and administrative bandwidth is wasted.
The Philippines is not starting from zero. Tatak Pinoy, the National Innovation Agenda and Strategy Document, and the enactment of CREATE More all reflect a serious commitment to a productivity-led agenda.
The next frontier is to ensure that firms and investors face a coherent, mutually reinforcing set of signals and support.
The global economy is undergoing a profound realignment: geopolitical fragmentation, supply-chain restructuring, the rapid advance of artificial intelligence and automation, and an accelerating green transition.
For middle-income countries like the Philippines, this moment brings both risk and opportunity.
Countries that invest now—positioning firms and workers in higher-value segments of global value chains, advanced manufacturing, digital services, and green industries—will be better placed to capture tomorrow’s jobs and prosperity. Those that rely on yesterday’s instruments will fall further behind.
For this forum to create real value, it must be genuinely interactive.
I want to hear from the practitioners in this room who understand where the bottlenecks truly lie. I want to hear from the private sector about what government must do to enable investment, scale, and competitiveness. And I want to hear from our academic and think-tank partners about what the evidence tells us—and where uncertainty remains.
I am optimistic about what this forum can achieve. The issues before us are complex, but they are not beyond our capacity to address.
Let us move this conversation from principle to practice, from programs to outcomes, and from fragmentation to coherence.
The choices made in rooms like this do not remain on paper. They shape whether the next generation of Filipinos enters an economy that is merely growing—or one that is becoming more productive, more competitive, and more inclusive.
Maraming Salamat Po! Thank you, and I wish you a productive discussion.