Missing the tech boom

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According to an IMF blog article written by Tobias Adrian and Pierre-Olivier Gourinchas, global economic growth continues to show notable resilience despite significant US-led trade disruptions and heightened uncertainty.

According to their latest projections, global growth will hold steady at 3.3 percent this year, an upward revision of 0.2 percentage points compared to October estimates, with most of the improvement accounted for by the US and China. Their current projections are broadly unchanged from a year earlier, as the global economy shakes off the immediate impact of the tariff shock.

They note that the resilience is surprising and reflects a confluence of factors, including easing trade tensions, higher-than-expected fiscal stimulus, accommodative financial conditions, the agility of the private sector in mitigating trade disruptions and improved policy frameworks especially in emerging market economies.

Another key driver of this resilience, they point out, is the continued surge in investment in the information technology sector — especially in artificial intelligence. While manufacturing activity remains subdued, IT investment as a share of US economic output has surged to the highest level since 2001, providing a major boost to overall business investment and activity.

Although this IT surge has been concentrated in the US, it is also generating positive spillovers globally, most notably to Asia’s technology exports.

The IT investment boom reflects businesses and markets’ optimism about the transformative potential of recent tech innovations — in automation and AI — to deliver sizable productivity gains and to lift profits. Since late 2022, coinciding with the introduction of the first widely used generative-AI tools, stock prices have risen sharply.

Unfortunately for us, we don’t seem to be benefitting from the positive outlook. Our neighbors like Taiwan, Japan and South Korea are major players in AI chip design and manufacturing.

Our ASEAN neighbors like Malaysia and Vietnam are now key players in the manufacture of advanced chips, and Singapore continues to lead in research and development, intellectual property rights protection and advanced manufacturing.

The Philippines, unfortunately, seems to have stalled in developing our semiconductor industry, even as sector continues to optimistically project growth.

Our very own Ayala-led Integrated Micro-Electronics Inc. or IMI seems to be missing out on this AI chips boom, unable to help lift up the local stock market, with its own stock value dropping.

But according to the IMF blog report, favorable financial conditions and robust earnings­­ have supported rising stock prices elsewhere and helped fund new capital spending.

The writers noted that “rising stock prices over the past few years have been driven predominantly by the technology sector, in particular AI-related stocks, and this narrow group has become a major driver of the index.”

Perhaps investing is quietly being done by some foreign chip makers operating in our special economic zones, well and good. But we have not heard of any new major investments being announced. Hopefully, we don’t miss out on this AI tech boom, even as we seem to be quite late in adopting AI technology.

My recent vacation to Singapore made me realize once again how far behind we are in adopting technology, and despite our claim to be tech savvy, in reality we are still very much lacking in modern technology that should be making our lives better at this point.

Upon arrival at Singapore’s Changi International Airport, the advancement in technology is already apparent, with efficient computer scanning machines doing away with human immigration officers in screening and checking travel documents of arriving passengers in less than a minute.

The same efficiency is experienced upon departure, with computer machines facilitating the check-in process and even baggage handling. No long waiting lines. Only a dozen or so check-in hubs.

There are one or two senior personnel who can help acquaint first-time users on how to check-in and put on the baggage stubs and place the baggage on the self-service baggage conveyor belt for scanning and delivery to the airplane.

Once the traveller is familiar with the process, they can completely do the check-in process by themselves. No fuss, no hassle, efficient.

Same goes with the immigration process, simply scan your passport and the doors open. No queuing. No lines.

Even in the purchase of goods and securing duty-free exemption, the process starts from stores where one’s passport is scanned and the details are inputted in the sales transaction. Upon arrival at the airport, the traveller must proceed to the GST counter first to have the goods checked and verified if they are packed in the luggage. If the purchased goods are hand-carried, the check-in process must be done first.

The unique thing about the tax refund is that no other documentation needs to be presented as all purchase transactions are already linked to your scanned passport. Once verified, the visitor/passenger goes to the refund counter to get his tax refund either in cash or credited to his/her credit card. Again, quick, efficient.

Same goes for Singapore’s transportation system — one transport card that can be used for the MRT or subway train, and for the bus system that serves the entire city. Simply tap the card upon entrance at the MRT or upon boarding the bus, and again upon exiting the MRT or upon disembarking from the bus.

To make things easier for tourists, there is a Singapore tourist card that is good for up to five days, two days or one day.

Sadly, it may still take a couple of more years to see such technology in our infrastructure facilities. Even in our international airport, while it is a welcome improvement, there were only about a dozen computer scanning machines at the NAIA T3 and only for Philippine passport holders.

Thus, balikbayans with foreign passports and foreign visitors still have to line up at the immigration counters. But even before getting to the immigration counters, as I had previously noted in my column upon my departure, T3 badly needs to add more toilet facilities even for arriving passengers who were unable to use the airplane lavatories due to the long landing time.