While the relationship between productivity advance and economic growth has long been recognized by both economic researchers and practitioners, at no time has the significance of such link been considered more crucially than today when greater productivity is taken to be a key element in the Philippines’ current economic recovery program. Taken in such light, the study presented in this monograph assumes greater relevance and importance. It traces productivity change over the period 1956-1980 in the Philippine manufacturing sector as a whole and in two dozen individual industries at the three-digit level, analyzes the causal factors behind this change and looks into the process of diffusion of productivity gains. The findings of the study cannot be taken lightly. It indicates that productivity in Philippine manufacturing has been declining since the late fifties and that accordingly, productivity gains in agriculture have been offset by productivity declines in the manufacturing sector. This should lead policymakers to take a second look at the industrial policy environment and institute early actions that can reverse the trend.
