THE INDUSTRIAL SECTOR

DEFINITION:

Belongs to the secondary sector of the economy that involves in the production
of consumer and capital goods which are needed by the economy.

IMPORTANCE:

Economy
- It processes the raw materials.
Raw materials from agricultural sector are delivered to the industries to manufacture them
into high value-added products

INDUSTRIAL SECTOR: The Secondary Sector of

Ex. Palay → Rice Mills → Rice

- It supplies finished products and equipment to agriculture.

The needs of agriculture for its development are supplied by the industrial sector.
Ex. Pesticides, equipments, modern technology, facilities

- It earns dollars for the country.

Industrial products go to local and foreign market. These dollars are use in buying products
manufactured in other country like machineries and electronics.

- It provides employment and livelihood.

Helps in keeping high incidence of unemployment and poverty in the country.

COMPOSITION OF INDUSTRY:

- Manufacturing
The processing of raw materials into finished products.

- Construction
It is the building of structures like factories, industrial sites, and high-rising buildings.

- Services
This includes distributing, creating and selling electricity, gas, and water.

- Mining
This is the extraction of precious metals, precious stones and various minerals.

**Industry is composed of all kinds of firms, which are established in the economy.

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PROBLEMS OF THE INDUSTRIAL SECTOR:

- LACK OF CAPITAL
Big amounts of capital are needed to improve our industries: to purchase modern
machineries and facilities, and to increase salaries for workers and managers.

- LACK OF SUPPORT AND PROTECTION FROM GOVERNMENT

Most industries in the country are “infant industries” (small-scale and just starting). The
existing government policies (the import liberalization program) weakens these industries
and leads to bankruptcy, thus hindering industrial development in our country.

Economy
- COMPETITION FROM FOREIGN COMPANIES
Our Filipino-owned industries have limited capital compared to multinational companies,
plus, most Filipinos patronize and preferred their products. The banks also favor the

INDUSTRIAL SECTOR: The Secondary Sector of

granting of loans to foreign-owned industries over the Filipino-owned ones. In addition,
most skilled and expert workers prefer employment in foreign companies due to higher
salaries. Eventually, this leads to the detriment of local manufacturers and Filipino
entrepeneurship.

- IMPORT-DEPENDENT INDUSTRIES
Yearly, the Philippine government spends more than 30 million dollars for the importation
of modern machineries & technology to modernize the industrial sectors, but by doing so,
the said sectors become so dependent on import.

POSSIBLE STEPS TO SOLVE THE PROBLEMS OF THE INDUSTRIAL SECTOR:

- Utilize the country’s natural resources for industrial needs.

- Limit the export of agricultural products, which are needed by the industries.
- Abolish the import liberalization program of the government.
- Implement projects that will boost and benefit the industries.
- Protect the interest of small-scale industries by setting a policy on tariffs and quota.
- Give priority to the needs of the industry.
- Provide loans to Filipino businessmen for their capital.
- Show political will in the government’s effort to help & support the industrial sector.
- Attract foreign companies that are not competitors of our local companies.
- Give subsidy & incentives to small-scale industries.

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TYPES OF INDUSTRIES:

- COTTAGE INDUSTRIES
* considered as a small-scale industry
* produces handmade or handicraft products
* small amount of capital is needed
* workers use simple machines and equipments and are not more than 100
* incentives are given such as low interest rates on loans and tax payment exemptions

- MEDIUM-SCALE INDUSTRIES

Economy
* produce products like furnitures, jewelry, clothing and other consumer durables
* the capital is much more bigger but not more than one million
* the number of workers increased from 100 to 200
* many Filipino businessmen belong to this group

INDUSTRIAL SECTOR: The Secondary Sector of

- LARGE-SCALE INDUSTRIES
* uses heavy equipments and machineries, employs more workers, & invest more capital
* produced products like cars, cement, medicines, oil products & other electronics
* have higher and bigger loans provided by financial institutions, and also taxes
* they are much more needed by the economy
* ensures sufficient supply of industrial goods, employment, and collection of big taxes

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