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Are you among the businesses that are interested in understanding how the proposed amended economic provisions in the 1987 constitution can help the development of the advertising industry in the Philippines? Let's delve in together.
Both Houses of the 19th Congress in the Philippines filed a new bill seeking to amend certain economic provisions of the 1987 Constitution. The primary objective of the bill is to bolster the economic growth in the Philippines by easing the process of doing business, specifically for foreign entrepreneurs
Senate President Juan Miguel Zubiri, tasked by President Marcos to review the current constitution, proposed certain economic provisions including the liberalization of public services, basic education, and the advertising industry in the Philippines.
In this article, we will further assess the current advertising industry and its need of economic provision in the Constitution.
What are the Proposed Amended Economic Provisions in the Constitution?
Public Service Act (RA 11659)
In March 2022, the Philippines enacted the Public Service Act (RA 11659), distinguishing public services from public utilities and allowing full foreign ownership in industries like telecommunication, shipping, airline, railway, toll road, and transport network vehicles. This move eliminates the previous 40% constitutional limit on foreign ownership in these sectors.
Zubiri proposes to enhance the Public Service Act with the following amendments:
Foreigners can own public utilities and educational institutions at least 60%
In terms of the advertising industry, foreigners can own at least 70%
Other proposed amendments to boost the economic growth of the Philippines :
Foreign Investment Act (RA 11647)
Simultaneously, the Foreign Investment Act (RA 11647) removed certain industries from the "Foreign Investment Negative List," enabling 100% foreign ownership in sectors such as startups, startup enablers, and enterprises with advanced technology.
Retail Trade Liberalization Act
The Retail Trade Liberalization Act was amended in January 2022 (RA 11595), lowering the paid-up capital requirement for foreign retailers from the peso equivalent of US$2.5 million to a minimum of P25 million.
Renewable Energy Project Development
Renewable energy project development such as solar, hydro, and wind resources should not be subject to the 40% foreign ownership restriction as these renewable sources are not 100% owned by the state.
Regional Comprehensive Economic Partnership
In February 2023, the Philippines joined the Regional Comprehensive Economic Partnership (RCEP), the world's largest trade pact, minimizing trade restrictions. While opposition to RCEP is more ideological than constitutional, concerns revolve around potential decreased exports and loss of tariff revenues, especially for developing countries like the Philippines.
Why Do We Need to Liberalize the Advertising Industry in the Philippines?
Similar to other sectors, there are many benefits if foreigners are allowed to invest in the advertising industry in the Philippines with up to 70% ownership:
More job opportunities
More ways to upskill talents and skills
Improved compensation packages
Better advertising services
Lawmakers have assessed that in today’s digital age, the Philippines needs better advertising agencies that will bring out the best of the businesses:
Diverse Expertise and Innovation
Foreign advertising companies often bring a wealth of diverse expertise and innovative ideas to the table including digital marketing and branding strategies.
Global Competitiveness
A liberalized advertising industry enhances the competitiveness of Philippine businesses on the global stage, promoting products and services with global standards and industry best practices.
Technological Advancements
Foreign advertising companies are often at the forefront of technological advancements in the industry. Global companies leverage technology to offer holistic approaches including branding and marketing solutions.
Market Expansion
Liberalization provides an avenue for Philippine brands to explore new markets with the support of experienced foreign advertising partners.
Cultural Exchange and Sensitivity
Collaborating with foreign advertising experts allows for a cultural exchange that enhances cultural sensitivity in branding.
Now that we know the future that awaits with the liberalization of the advertising industry in the Philippines, wherein digital marketing and branding strategies are also positively affected, let us discuss the current trends of the said industry.
The Trends of Advertising Industry in the Philippines
The continuing growth of digital advertising influences the way consumers consume online information. The advertising industry in the Philippines is undergoing a transformative journey, propelled by dynamic shifts in consumer behavior, technological advancements, and evolving market demands.
Here are the incredible trends in the advertising industry in the Philippines:
Digital Dominance
The Philippines is experiencing a robust surge in digital advertising, with a significant shift towards online platforms. As internet penetration continues to rise, advertisers are leveraging the power of digital channels to engage with a diverse and tech-savvy audience.
There are many digital marketing agencies in the Philippines, such as MCBrands, that offer holistic approaches. From advertising, digital marketing, and branding, we are strategically providing solutions for businesses to grow while engaging to a wider audience.
Mobile-First Approach
Mobile devices have become an integral part of Filipinos' daily lives. The data indicates a growing trend in mobile advertising, emphasizing the importance of creating campaigns tailored for smartphones and tablets to reach consumers on the go.
Video Content Reigns
The demand for video content is skyrocketing, with consumers increasingly favoring visually engaging narratives. Advertisers are capitalizing on this trend by investing in video advertising strategies across various platforms, from social media to streaming services.
The Rise of E-commerce
The rise of e-commerce has reshaped consumer habits, and advertisers in the Philippines are adapting accordingly. Brands are exploring innovative ways to connect with online shoppers, utilizing targeted ads and personalized campaigns to enhance the e-commerce experience.
Programmatic Advertising Growth
Programmatic advertising is gaining traction in the Philippines, revolutionizing the way ads are bought and displayed. Automation and data-driven strategies are becoming pivotal in optimizing ad placements for maximum impact and efficiency.
Influencer Marketing Evolution
Influencer marketing continues to evolve, with influencers becoming powerful brand advocates. Advertisers are collaborating with influencers, who are honed with digital marketing and branding strategies, across diverse niches to authentically connect with audiences and drive brand awareness.
Sustainable Branding
Conscious consumerism is on the rise, and brands are recognizing the importance of sustainability. Advertisers are incorporating eco-friendly and socially responsible messaging into their campaigns to resonate with a socially conscious audience.
Augmented Reality (AR) and Virtual Reality (VR)
As technology advances, immersive experiences through AR and VR are becoming integral to advertising strategies. Brands are experimenting with interactive and virtual campaigns to captivate audiences and provide memorable brand experiences.
Data Privacy Emphasis
With the increasing focus on data privacy, advertisers in the Philippines are prioritizing transparency and compliance with data protection regulations. Building trust through responsible data practices is crucial in the evolving landscape.
Cross-Channel Integration
The future of advertising lies in seamless cross-channel integration. Brands are adopting omnichannel approaches, ensuring a cohesive brand presence across various platforms to create a unified and memorable customer experience.
At MCBrands, our team of social media experts is well-skilled to adopt the latest branding strategies in promoting brands on various social media channels. We leverage data insights from social media platforms to strategically develop ways to improve brand image while aiming to improve sales.
Liberalization of Business to Foster Growth
A study from Bangko Sentral ng Pilipinas showed that the Philippines can improve the way business is done by increasing the Foreign Direct Investments (FDI) initiatives, such as reduction of FDI restriction and corporate tax rate, to attract more investors.
More investors mean more businesses to generate job opportunities, leading to economic prosperity for the Philippines. Respectively, the study also determined that the quality of human capital appears to be more important than the cost of labor. Thus, allowing foreign companies to invest in the advertising industry in the Philippines can enhance Filipino talents and skills.
Today, the trends in the advertising industry in the Philippines are significantly focused on digital innovation and changing customer demand. The industry has grown and the mode of advertising has shifted to digital methods. With the ongoing proposal of the amendments of the economic provisions, do you think that the advertising industry in the Philippines will significantly grow faster given that the current landscape is developing through digital advancements? Feel free to share your thoughts in the comment section.
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