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Source: Based on information from United States.
Department of the Interior. Bureau of Mines, Mineral Industries of the Far
East and South Asia, Washington, 1988, 100-109.
Manufacturing
Immediately after independence, the government concentrated its efforts on
reconstructing and rehabilitating the war-damaged economy. In 1949 import
and foreign exchange controls were imposed to alleviate a balance of
payments problem. Imports fell dramatically, providing a stimulus for the
development of light industry oriented toward the domestic market.
Manufacturing growth was rapid, averaging 9.9 percent per year during the
1950s. Initially, textiles, food manufactures, tobacco, plastics, and light
fabrication of metals dominated. There also was some assembly of automobiles
and trucks and construction of truck and bus bodies. By the early 1960s,
however, manufacturing growth declined to slightly less than the growth of
GNP. The share of the labor force in manufacturing in 1988 was 10.4 percent,
less than it was in 1956, although the share had grown to 12 percent in
1990.
By the late 1980s, and in part the consequence of local content laws that
were intended to enhance linkage among various manufacturing industries and
increase self-sufficiency, the industrial structure had become more complex,
with intermediate and capital goods industries relatively large for a
country at the Philippines' stage of development (see table 10, Appendix).
By the mid-1980s, an ambitious US$6 billion industrial development program
originally undertaken by the Marcos regime in 1979 had resulted in
operational copper smelter-refinery, cocochemical manufacturing, and
phosphatic fertilizer projects. A cement-industry rehabilitation and
expansion program and an integrated iron and steel mill project were still
underway. A petrochemical complex appeared about to be undertaken in 1990,
but was bogged down in a dispute over location and financing.
Manufacturing output fell in the political and economic crisis of 1983, and
industry in 1985 was working at as low as 40 percent of capacity. By the
middle of 1988, after economic pump priming by the Aquino regime, industries
were again working at full capacity. In 1990 the Board of Investments
approved investment projects valued at US$3.75 billion, including US$1.48
billion targeted to the manufacturing sector.
Manufacturing production is geographically concentrated. In 1990, 50 percent
of industrial output came from Metro Manila (see Glossary) and another 20
percent from the adjoining regions of Southern Tagalog and Central Luzon
(see fig. 6). Prior to 1986, government efforts to distribute industry more
evenly were largely ineffective. In the post-Marcos economic recovery,
however, investment grew in small and medium-sized firms producing
handicrafts, furniture, electronics, garments, footwear, and canned goods in
areas outside of Metro Manila, particularly in Cebu City and Davao City.
In 1990 the industrial sector was inefficient and oligopolistic. Although
small- and medium-sized firms accounted for 80 percent of manufacturing
employment, they accounted for only 25 percent of the value added in
manufacturing. Most industrial output was concentrated in a few, large
establishments. For example, a six-month Senate inquiry determined in 1990
that eight of the country's seventeen cementmanufacturing companies were
under control of a single firm.
Data as of June 1991
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