The Role of Filipino Conglomerates in the Nation's Development

• Main Author: Felipe, Jesus
• Format: text
• Published: Animo Repository 2023
• Subjects: Philippines; Conglomerates; Growth and Development; Economic Transformation; Trade; Industrial Organization
• Online Access: https://animorepository.dlsu.edu.ph/res_aki/171; https://animorepository.dlsu.edu.ph/context/res_aki/article/1171/viewcontent/DLSU_AKI_POLICY_BRIEF_2023_08_008.pdf
• Institution: De La Salle University

Could the country's small and medium companies be the engines of transformation that it needs to attain and sustain the 6.5-8 percent annual growth targeted in the Philippine Development Plan 2023-2028? I doubt it. They have neither the knowledge nor the financial muscle to do it. There is another group of companies that could lead the way. These are the large conglomerates of the nation. They have much better knowledge of the economy and financial power. Yet, in general, they do not innovate or export. Instead, they are into non-tradable activities (real estate, banking, distribution, insurance, construction, telecommunications and food). They cater to a large domestic market by providing services that nobody denies are needed. There is nothing to criticize about specializing in non-tradables. The point is that while other nations have conglomerates and companies specializing in non-tradable activities, they also have conglomerates that innovate and export, like Toyota, Philips and BMW. No Filipino conglomerate is in this league. This matters because development requires "things" that non-tradable activities hardly provide and which ultimately lead to productivity gains.