The time has come to uncouple DTI and create a Department of Trade to take care of external and domestic trade matters and a Department of Industry and Investments.
From time to time, the architects of the structure of the Executive branch of the government have made adjustments to the Cabinet departments in response to the needs of changing times. Cases in point are the Cabinet departments concerned with natural resources, transportation, labor, communication, technology, education, culture, sports and tourism.
Believing that basic education, secondary education and tertiary education deserved separate attention and that culture and sports were not too closely related to education, the Executive branch and Congress decided to break up the Department of Education, Culture and Sports (DECS) into five entities: the Department of Education (DE), Commission on Higher Education (CHED), Technical Education and Skills Development Authority (TESDA), National Commission for Culture and the Arts (NCCA) and Philippine Sports Commission (PSC).
The Department of Transportation and Communication was split into Department Transportation (DOTR) and Department of Information and Communication Technology (DICT) when the Executive branch and Congress came to agree that transportation and communication were two unconnected objects of governmental activity.
When the Executive branch and Congress came to believe that good management of this country’s natural resources would be more surely achieved if those resources were linked to the environment, the Department of Agriculture and National Resources (DANR) became the Department of Agriculture (DA) simply, and the Department of Environment and Natural Resources (DENR) was created.
When the Executive branch and Congress became convinced that the nation’s bagong bayani—the overseas Filipino Workers (OFW) deserved a Cabinet department of their own, the OFW related functions of the Department of Labor and Employment (DOLE) were transferred to the newly-created Department of Migrant Workers (DMW).
By correcting the structural weaknesses of the Cabinet and making possible due recognition of the changes that have taken place in the marketplace and in Philippine society, these changes have facilitated the jobs of national governance.
But the work of the Cabinet restructurers is not over. There is one more restructuring that they need to perform. The object of the needed restructuring is the Department of Trade and Industry (DTI).
Since 1946, when the first non-colonial Cabinet was established, trade/commerce have been coupled with industry, except for a brief period when they were coupled with tourism. Thus, the Department of Commerce and Industry (DCI) administered the trade and industrial affairs of this country, until it was renamed Department of Trade and Industry (DTI) with the reorganization of the government.
The idea that the trade and industry belong together and that one Cabinet entity should be administering the country’s trade and industrial affairs is essentially flawed. One doesn’t need to be an economist to appreciate that trade and industry are not one and the same thing. In the most simplistic formulation, industry relates to the production of goods and services, while trade relates to their distribution. The production of goods and services involves a community of people possessed of facilities and technologies for producing goods and services. Trade, on the other hand, involves a community of people possessed of facilities and skills for ensuring that goods and services move smoothly from producers to consumers.
Both triads and industry are very essential to the well-being and progress of a country. They require focus, close attention and specialization. One should not place them under a common administrative roof and expect the best results to materialized.
In our case, the best results have not materialized from placing trade and industry policymaking in one Cabinet department. The trade and industry data show this. This country’s external trade in merchandise has for a long time been deficit-ridden; the 2023 deficit was in the vicinity of $72 billion. And of course, it is by now well-known that on the side of foreign direct investment (FDI), from which industry derives most of its resources, the Philippine continues to perform badly, attracting less FDIs than most ASEAN countries. There is little reason to believe that these performances will improve significantly anytime soon.
The time has come to uncouple DTI and create a Department of Trade to take care of external and domestic trade matters and a Department of Industry and Investments (with the Board of Investments) to oversee industry and investments. It’s time to stop pretending that the DTI is doing a good job.
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