poverty

PATALINGHUG

Competition Policy, Technology Policy, and Philippine Industrial Competitiveness

Epictetus E. Patalinghug

Abstract
The disappointing performance of the Philippine industrial sector in the past five decades has been attributed to several factors such as the lack of a stable macroeconomic environment, poor infrastructure, low productivity, low savings rate, and an overvalued currency.
This paper attempts to summarize the link between competition policy, technology policy, and industrial policy, and suggests direction for future industrial policy. It gives a brief discussion on recent
Philippine industrial development; analyzes the scope and elements of competition policy; and gives an assessment of industrial policy in the Philippines.

Introduction
The disappointing performance of the Philippine industrial sector in the past five decades has been attributed to several factors such as the lack of a stable macroeconomic environment, poor infrastructure, low labor productivity, low savings rate, and an overvalued exchange rate. Export, investment, and growth performance of the sector have likewise failed very poorly relative to its ASEAN neighbors.
The Philippine industrial structure used to be highly protected and its capital-intensive bias led to absorption of only a small fraction of the labor force, while

SOCIAL SCIENCE DILIMAN (January-June 2000) 1:1, pp. 31-59

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COMPETITION POLICY, TECHNOLOGY POLICY, AND PHILIPPINE INDUSTRIAL COMPETITIVENESS

the agriculture and services sectors absorbed the bulk of the labor force.
This traditional industrial structure was directly responsible for the absence of a strong export growth in non-traditional manufactures.
In the past, several studies had identified the adverse effects of the import-substitution strategy that was anchored on high tariff, quantitative restriction, and overvalued exchange rate. No structural change took place and a high degree of

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