Swiss see ties with PHL focused on innovation, cite red tape concerns

By Alyssa Nicole O. Tan, Reporter

THE Swiss chamber of commerce said it expects areas of cooperation with the Philippines to center on innovation, but called on the government to simplify its trade processes and benchmark against regional power and labor costs to allow investors to scale up.

“For the Swiss Chamber of Commerce of the Philippines (SwissChamPH), we are aligning the priority areas of both Switzerland and the Philippines,” SwissChamPH Chairperson Christine Fajardo told BusinessWorld on the sidelines of the Swiss Embassy’s Innovation Exhibit.

“SwissChamPH aims to position the Philippines as a stable business location for investment growth,” she added. “We look forward to collaborating in areas where there are synergistic solutions.”

Switzerland’s priority industries, based on economic impact, are the mechanical, electrical, and metal or MEM industry; infrastructure; food; cleantech; financial technology; and medical technology, she said.

Trade Secretary Alfredo E. Pascual, speaking at the event, said the Philippine priorities are to embrace the fourth industrial revolution by harnessing new technology such as artificial intelligence and smart manufacturing.

“The strategy will involve accelerating the small business growth by enabling them to scale from small to medium and from medium to large,” Mr. Pascual said.

“We will integrate our production systems for instance, by leading manufacturing, agriculture and services,” he said. “We will deepen our global value chain participation, pursue aggressive trade and investment policy, and diversify our exports trade and investment partners.”

Other areas of focus include developing human capital and building capacity, supporting regional industrial transformation, and making the economy more attractive to investment.

Some of these priorities, Ms. Fajardo said, are aligned with Swiss areas of focus. “This is clearly aligned, in terms of what we can prioritize and it’s a wide spectrum, so there’s a lot of opportunity areas,” she said.

She said SwissChamPH has sought to develop innovation initiatives in three areas — health and life sciences, manufacturing, and retail.

One of the immediate goals of this initiative is “a white paper on priority areas and let’s say the challenges and opportunities, and then recommend priority projects for the companies in terms of collaboration,” Ms. Fajardo said.

The chamber, she added, has done the most advanced work in the health and life sciences cluster, noting that it is prepared to expand its membership to more Swiss and Filipino businesses in various industries.

The targets for membership expansion are those businesses seeking to initiate and maintain links with Switzerland, gain a foothold in both the Philippine and Swiss markets, and participate in the broader markets of the Association of Southeast Asian Nations and Europe.

Swiss Ambassador to the Philippines Alain Gaschen told the media during the event that: “We have a whole page of potentials, so pharmaceutical is one… We also see a lot of potential in the cleantech industry and infrastructure.”

He also mentioned railways as a possible area of collaboration.

“We looked into processed food, natural ingredients and textiles, and these have huge potential,” he said.

The requirements of the Swiss market in the event of collaboration are that “You have to deliver on time, package it properly, label it properly, and you have to have the quantities and the quality that is required for the European market, but we have a guide for those industries step by step that we can share, and then we open for business,” he added. “So basically, there’s a lot that can be done.”

He said the Philippines presents obstacles in scaling up such businesses.

“Electricity (is) a challenge to infrastructure,” Mr. Gaschen said, adding that red tape and market access are also deterrents to investment.

The general manager of biotech company Roche, Diana Edralin, said, “One of the things that we can really (focus on) in terms of something concrete in healthcare, is predictability in the review and approval of innovative medicines and devices.”

“I know that the Philippine FDA (Food and Drug Administration) has now made bold steps in approving the reliance pathway,” she added, referring to an international best practice in which a national regulator takes into account approvals granted by other national regulators in evaluating products such as pharmaceuticals for its own market.

Ms. Edralin said she recognizes the FDA’s eagerness to fully implement the reliance pathway to speed up the approval process.

She noted that prior to the pandemic, it took about two to three years for the Philippines to approve a lifesaving innovation, device, or diagnostic procedure.

“During the pandemic, we were able to see that we can actually find agile and flexible ways on how to go about ensuring that we simplify the processes to allow for innovation to happen,” she said.

“The second opportunity in healthcare is again how we are fully funding and implementing Universal Health Care, and the National Integrated Cancer Control Act, even the Rare Conditions Act, properly,” she said.

“So, these are really wonderful laws, but if you want further innovation to happen, I think there’s an opportunity for us to make sure that the provisions within those laws, again, allow for innovation and exchange through public-private partnerships,” she added.

Construction and Industrial company Sika Philippines, Inc. General Manager Christophe Lejeune said that the cost of power and labor in the Philippines is uncompetitive.

“I think it’s important for the DTI (Department of Trade and Industry) and for other government agencies to look around what’s happening in Asia Pacific, so that they can benchmark and look at ways to contribute to making the country more efficient,” he said.

“The Philippines is a very attractive market. As the ambassador was mentioning, you’re talking about 110 million people in the housing sector and construction sector,” he added, “so some things could be improved so that we can work faster and better.”

Holcim Philippines, Inc. Chief Executive Officer Horia Adrian said, “the word that is important here is efficiency.”

“There are higher costs for labor, for electricity, but at the end of the day, there are solutions to bring these costs down, and these solutions are built with innovation,” he said.

“I think it is important to accelerate this reduction of bureaucracy in terms of permitting,” he added. “If you have a faster way to build innovation, to build efficiency, then this has to be facilitated. And that’s for me the important message here, to create a level playing field with other countries abroad and to make sure that we as a country are accelerating the growth because there will be a need for growth in the Philippines.”