“The world is no longer competing primarily through markets. It is competing through capabilities,” Department of Trade and Industry Undersecretary Ceferino S. Rodolfo said on November 10.
The Association of Southeast Asian Nations must shift its economic strategy from attracting investments and cutting trade barriers to deepening cooperation in technology and industrial development, Rodolfo told the Asean Investment Forum in Makati, BusinessMirror reported.
While the bloc’s longstanding focus on opening markets established it as a major investment destination, that approach no longer sustains regional competitiveness. The next phase requires connecting national strengths in semiconductors, renewable energy, critical minerals, and advanced manufacturing to build interconnected regional industrial ecosystems.
Greater coordination in resources, technologies, and production capacities is necessary because industries shaping the global economy are increasingly interdependent rather than developed independently. Critical minerals support battery production and semiconductors, while renewable energy powers data centers and artificial intelligence infrastructure.
Combining regional strengths
Rodolfo outlined the distinct industrial advantages across member states, pointing to Indonesia for critical mineral resources and Malaysia for its semiconductor industry. Thailand provides a manufacturing base, Vietnam supplies an electronics sector, and Singapore offers financial, technology, and innovation capabilities.
The Philippines adds its own semiconductor industry, engineering services, and digital workforce to the regional mix. In 2024, the region accounted for more than 20 percent of global semiconductor back-end operations, but less than 10 percent of front-end activities including research, design, and wafer fabrication, according to the Asean Investment Report 2025.
“Instead of asking, ‘Why invest in my country?’ perhaps we should ask, ‘What can investors build if they can access the capabilities of Asean?’” Rodolfo said, urging governments and investors to look beyond competing for individual projects.
Implementing this integration requires closer coordination among economies with varying levels of industrial development and technological capacity. Rodolfo did not outline specific mechanisms, targets, or timelines for the transition during his remarks.
Financing industrial integration
Strategic capital pools across Southeast Asia can finance regional industrial development alongside existing market, workforce, and manufacturing capabilities. Rodolfo identified key institutional investors capable of funding this shift, including Singapore’s Temasek and GIC, Malaysia’s Khazanah, Indonesia’s Indonesia Investment Authority and Danantara, and the Philippines’ Maharlika Investment Corporation.
The primary challenge remains pooling these financial resources instead of using them solely to attract investments into individual countries. The region’s integration into global value chains was cited as a foundation for deeper industrial cooperation.
“The first 50 years of ASEAN were about opening markets. The next 50 years must be about building capabilities,” Rodolfo said.
Connecting ASEAN sectors for industrial integration
What specific sectors does ASEAN need to connect for industrial integration?
The strategy focuses on connecting national strengths in semiconductors, renewable energy, critical minerals, and advanced manufacturing to form regional industrial ecosystems.
Which financial institutions were identified to fund the initiative?
Rodolfo pointed to regional institutional investors including Singapore’s Temasek and GIC, Malaysia’s Khazanah, Indonesia’s Indonesia Investment Authority and Danantara, and the Philippines’ Maharlika Investment Corporation.
What percentage of global semiconductor operations did ASEAN hold in 2024?
The region accounted for more than 20 percent of global semiconductor back-end operations and less than 10 percent of front-end activities, according to the Asean Investment Report 2025.
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