The country needs to upgrade its current rubber operation to establish a competitive position in the natural rubber global value chain (GVC), according to a policy brief by the Department of Trade and Industry (DTI)-Bureau of Trade and Industrial Policy Research.
Citing an earlier study, the report said key actors in the GVC can capture higher value from their participation through the adoption of new technologies, creation of new products, or engaging in new activities.
To ramp up domestic production, it underscored the need for the country to encourage farmers to use more modern agricultural techniques, such as higher quality planting materials and fertilizers, improved irrigation, and pruning techniques.
“Increased production in the short-to-medium term could help support economies of scale for processors and encourage them to undertake process improvements,” it added.
The policy brief said it is imperative to improve processing operations for better quality of rubber and boost commodity prices, and diversify products in final product manufacturing using imported natural and synthetic rubber supply.
In the short term, this will also enable the country to potentially take advantage of the relatively strong export in final rubber products in the transport sector and the emerging producers in the healthcare sector.
“This opportunity, combined with the PEZA (Philippine Economic Zone Authority) and the BOI’s (Board of Investments) fiscal incentives, as well as the availability of manufacturing personnel, can help stimulate the rubber manufacturing operations in the country,” the policy brief said.
“This could also help encourage the demand for local production and processing of natural rubber in the long run,” it added.