Feb 28, 2024 to Dec 31, 2024
Funding Agency:
Focus Area(s):
Trade and Industry, and International Economy
Project Director:
Moreno, Neil Irwin S.

Servicification presents a valuable opportunity for the Philippines to move up the value chains. Services have been the main driver of the Philippine economy, accounting for at least half of the country’s GDP since the 1990s. Moreover, the sector has exhibited an increasing significance as a source of trade in value added for the country. However, Hansl and Cattaneo (2017) noted that, while the Philippines is a services economy and a lead exporter of services, it lacks efficient linkages between services and other industries. With servicification, rooted in the development of high services content in goods, becoming a major path to competitiveness in light of the emergence of new technologies, it would be important to assess whether servicification could indeed be a strategy for enhancing GVC participation and upgrading, especially in important sectors such as electronics.


The electronics sector has been the main driver of the Philippine GVC-related trade. However, the sector mainly performs in labor-intensive, back-end assembly and testing segments (Aldaba 2017). Value added data also show that the sector’s value chain participation has been mostly driven by foreign value added, implying that the sector has not generated substantial domestic value added. While electronics firms in the country have mostly exhibited product and process upgrading, functional upgrading through participation in higher value activities has been limited.


With the use of macroeconomic and firm-level data, the study aims to provide new stylized facts on the GVC participation and performance of the Philippine electronics industry. The findings could provide valuable insights for key stakeholders, such as the Department of Trade and Industry (DTI), in identifying upgrading strategies for the industry. These would also be relevant to current government efforts, most notably the Tatak Pinoy strategy. The said strategy aims to encourage local industries to produce more sophisticated products, which could subsequently improve the country’s GVC position (De Leon 2024).


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