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Industrial Agglomeration in the Philippines


  • Mari-Len Reyes-Macasaquit



The economic reform process in the Philippines was accelerated in the 1980s and 1990s. The reforms were found to have yielded positive results in terms of the nature of industrial agglomeration in the country as this was found to have occurred in the 1990s based on the results of the survey and econometrics analyses. The latter also identified the factors that influenced firms to agglomerate in the country, referring to economic fundamentals and deliberate policy and public action by government. However, industrial upgrading and innovation in the country was found to be weak. Expenditures on R&D are low and linkages between stakeholders are not strong. There are firms that have undergone upgrading in terms of introduction of new goods, upgrading of machineries, and opening of new markets but they tended to rely more on their in-house capabilities probably due to inadequate support from the governments institutional infrastructure and financial system, which came out from the estimation results. The agglomeration strategies that are currently being pursued in the Philippines establishment of economic zones and industry clustering have the potential to address some of the issues and problems identified.

Suggested Citation

  • Mari-Len Reyes-Macasaquit, 2008. "Industrial Agglomeration in the Philippines," Development Economics Working Papers 22690, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:develo:22690

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    References listed on IDEAS

    1. Herrin, Alejandro N. & Pernia, Ernesto M., 1986. "Factors Affecting the Choice of Location: A Survey of Foreign and Local Firms in the Philippines," Working Papers WP 1986-03, Philippine Institute for Development Studies.
    2. Austria, Myrna S., 1998. "The Emerging Philippine Investment Environment," Philippine Journal of Development JPD 1998 Vol. XXV No. 1-b, Philippine Institute for Development Studies.
    3. Rafaelita M. Aldaba, 2006. "FDI Investment Incentive System and FDI Inflows : The Philippine Experience," Finance Working Papers 22335, East Asian Bureau of Economic Research.
    4. Jenny D. Balboa & Erlinda M. Medalla, 2006. "State of Trade and Investments in the Philippines," Trade Working Papers 22612, East Asian Bureau of Economic Research.
    5. Patalinghug, Epictetus, 2003. "The Philippine National Innovation System: Structure and Characteristics," Discussion Papers DP 2003-04, Philippine Institute for Development Studies.
    6. Lamberte, Mario B., 1988. "Science and Technology and Economic Development," Working Papers WP 1988-28, Philippine Institute for Development Studies.
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    More about this item


    Industrial Agglomeration; industrial clusters; economic zones; industrial upgrading; innovation;

    JEL classification:

    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L53 - Industrial Organization - - Regulation and Industrial Policy - - - Enterprise Policy
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General


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