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Regional production networks and implications on trade and investment policies, and regional cooperation: the case of the Philippines

The new millennium brought forth a number of trends and issues that, combined, highlighted the importance of regional/global production networks (GPNs) on Asia’s economic growth. GPNs have come to be seen as dynamic topologies, which potentially change shape and scope over time. The GPNs are expected to supersede the transnational corporation as the most effective form of industrial organization, a shift that has emerged in response to three constituent processes of globalization; namely, the ascendancy of liberalization and foreign direct investment policies, the rapid up-take of information and communication technologies, and the onset of ‘global’ competition. This paper emphasizes the importance of trade and investment liberalization in the creation and success of GPNs. It draws attention to the significance of GPNs in the performance of three of the Philippine’s important industries, namely, electronics and electrical equipment, textile and garments, and automotive. The electronics and electrical equipment sector is the country’s leading non-traditional export followed by the textile and garments sector. Finally, it discusses the implications of GPNs on development policy.


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