PHL can be technology, innovation driver–ICCP

BusinessMirror | By Roderick Abad  – 

THE Philippines has a huge potential to become a pivotal player in global technology and innovation, but it needs to invest more in education, provide a business-friendlier environment and improve further its foreign relations, particularly with leading tech nations, according to a top-ranking official of a group of Israeli companies based here.

At the sideline of TechUp Tuesday forum held last week at the ARK by UnionBank in Makati City, Israel Chamber of Commerce of the Philippines (ICCP) President Itamar Gero told BusinessMirror that the country has gone so far in terms of adopting technological advancements mainly due to its tech-savvy young population.

“I think that in the last few years, you can feel it the most. Most advancements came in the last few years because it’s happening all over the world. And the Philippines, it’s not skipping a bit, trying really to keep the pace,” he said, adding that the young populace “is very fast to adopt to new technologies.”

The business-process outsourcing (BPO) industry, according to him, brings a lot of technology, knowledge and opportunities that people are now capitalizing on.

“So now is the time for the Philippines and Filipinos to take everything they learn and move forward very fast,” said Gero, who is also an entrepreneur and digital genius having programs and solidified his first commercial software at the age of 16. Israel is ranked 10th in the 2018 Bloomberg Innovation Index. Its second most populous city, Tel Aviv, has been named as one of the global tech hub “heavyweights,” being the home of big tech companies like Viber, and Waze, as well as a destination for tech start-ups. Multinationals like Google, Apple, Facebook and Microsoft also have research centers in this Middle Eastern country.

While the Philippines has a lot to learn from Israel to follow in its footstep and become one of the tech centers worldwide, the ICCP leader suggested both the public and private sectors to invest in quality education.

“It starts with education because there’s no magic bullet,” he said, citing the urgent need to work on a long-term plan and spending more to improve the education system in preparation of a very technical or technological time ahead. “So if the curriculum is being updated to reflect it, the future is yours.”

Gero, likewise, recommended the government to allow foreign ownership on businesses that are education-related to bring in external knowledge that is most relevant and up-to-date to international standards.

He noted the positive impact of incentivizing the higher education institutions to hasten their upgrade of the curriculum because it takes time for its effects to be felt—ideally up to five years.

“So they need to start today and they need to get a strong mandate. I think the government should be mandating that in preparation for artificial intelligence and the like, in preparation for higher technology adaptation in the country,” he said.

While the top ICCP officer lauded the provision of some financial stimulus for business locators in economic zones wanting to bring technological advancements in the country, he cautioned that there are still some tax reforms deemed disadvantageous to them. For instance, he cited, the second package of the Tax Reform for Acceleration and Inclusion (Train) law, a priority measure expected to be passed soon by the House of Representatives aimed at lowering the income tax for corporations.

“I think it might be a bit too early,” he stated, while citing that the removal of incentives would scare away potential foreign investors. “And to pull the plug now might mean that a lot of the knowledge and the know-how and the inspiration might move to countries like Vietnam, Indonesia [and] Thailand.”

Cognizant of the need to support local companies, however, he pointed out that the government should strike a balance by also backing foreign locators because driving away “30 percent of the industry right now will be detrimental to the technological advancement of the country.”

“These BPOs, or these big companies, they’re bringing in with them not only knowledge but also equipment,” Gero stressed.

He also emphasized the importance of giving equal footing to technology solutions providers here and abroad to participate in the “Build, Build, Build” project of the government.

“A lot of infrastructure projects are on the table, and some of them are starting to really happen and materialize. Again, it’s about striking a balance. Because there’s a strong push for the Build, Build, Build, maybe the push is bigger than the capacity to provide for it,” he explained. “So maybe balancing between this but still keeping important technological players in the country will be advisable.”

Given the good trade relations between the Philippines and Israel, the ICCP top executive sees that both countries can drive technology and innovation in various industries, most especially in agritech. Even though a lot of the arable lands in Asia is in Southeast Asia, he particularly mentioned that the Philippines is not making use of it in contrast to Israel that leveraged on technology to become a big producer and exporter of citrus products at present, as well as the third provider of flowers to the European Union after Nigeria and the Netherlands.

“How does a country that is half desert becomes that? It’s about pointing your efforts and seeing that is the right thing for this decade and just doing it properly. So obviously for this decade, technology is such an important move, and such an important push for the country,” he said.

“Bringing in more technologies that allow you to do more with less effort or resources, but give more yield or produce can make the Philippines a hub for the region, not just to be an importer but to become an exporter,” he added.

It’s noted that the Philippine government has asked the help of Israel, through its innovation agency, to implement an initiative to develop local industries.

Together with manufacturing and services, agriculture is another sector that the Inclusive Innovation Industrial Strategy (i3S) of the national government is focused on to accelerate growth with the assistance of the Israel Innovation Authority.

“I think it will be a very good move. I’m very much in favor [of it],” Gero said of this effort, which will be among the agenda in the upcoming visit of President Duterte to Israel this September. “I know that this is part of their discussion. Aside from opening a direct flight between Manila to Tel Aviv, they’re also going to talk about innovation and defense, and everything that currently matters to the Philippines. So I think he’s doing a good job at going to Israel and talking about the things that matter.”

The past few years saw the improving bilateral trade between the Philippines and Israel. In 2016 local goods exported to Israel grew by 23.6 percent to $57.14 million, from $46.23 million in 2015, mainly because of the hike in shipments of semiconductors, fish fillets and polypropylene.

The import value of the country from Israel, on the other hand, increased by 27.32 percent from $103.99 million to $132.4 million during the two periods in review. The Philippines outsources tanks and other armored fighting vehicles, semiconductors and raw materials for dice.

Organized in 2009, ICCP is an organization of individuals and companies that share a common interest in the pursuit and encouragement of bilateral and investment opportunities between the Philippines and Israel. It has since grown to have 130 active members nationwide.

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