The development experience of the past three decades has demonstrated the strategic role information technology (IT) has on the global economy. As an industry, IT has dominated world trade growth in the 1990s contributing to the rapid growth of exports. As a generic technology, it has also revolutionized production process by cutting costs and enhancing product quality and performance. The Philippines, since the mid-1980s, also became an integral part of that global electronic production network. The semiconductor industry has topped the country’s exports and has weathered the adverse effects of the recent financial crisis. Nonetheless, the country’s participation in the global network is threatened by its limited local activity on assembly and testing level, part of the production chain that only adds low value to production. This paper aims to assess the competitiveness of the Philippine IT industry and examine the factors affecting both its current and future development.
