What is the Tatak Pinoy Law?

In February, President Ferdinand Marcos Jr. signed of the Philippines law Tatak Pinoy (Proudly Filipino) Acta formal policy directing the government to support the development of domestic industry. To achieve this, the law creates a Council chaired by the Minister of Trade and Industry to plan, implement and monitor a national industrialization strategy. It requires the government to purchase locally produced goods over a ten-year period and creates special green lanes to expedite permits, licenses and certifications for priority projects.

At this point, many of the key details remain a bit vague. The law calls for prioritizing human resources, infrastructure, technology, innovation and investments and talks about forging strong ties between academia, government and industry. But it doesn’t get too specific about how this will all work in practice. For now, the Tatak Pinoy Act is probably best seen as an organizing framework intended to set the tone, align key actors, and guide them toward a shared vision.

What is that vision? The Philippines, like many emerging markets, is looking to move up global value chains and expand the role of domestic manufacturing in them. They want to create increasingly sophisticated and valuable products and then sell them domestically or as exports. To that end, the Tatak Pinoy Act signals the Philippines’ desire and intention to develop more valuable manufacturing activities that occupy higher positions in domestic and international production networks.

The Philippines has passed several bills intended to support this view, such as the 2021 CREATE Act (subsequently amended in 2024), adapting the tax system to make it more business-friendly. They have also opened several strategic sectors in recent years with up to 100 percent foreign ownership. These efforts, complemented by the strategic framework articulated in the Tatak Pinoy Act, should lay the foundation for increased investment, increased exports and increased industry-led growth.

However, they still have a long way to go. The Philippines typically imports far more goods than it exports, and the deficit has widened in recent years. According to balance of payments data at Bangko Sentral ng Pilipinas, the Philippines imported nearly $66 billion more in goods than it exported in 2023. The goods they export are highly concentrated in electronic products.

The purpose of the Tatak Pinoy Act is to diversify the industrial base and produce a broader range of value-added goods both for domestic consumption and for global markets. If this is done successfully, it will reduce the goods deficit in the balance of payments and we will see the Philippines produce and export a wider variety of products besides electronics.

It is worth noting that the current state of the global economy makes such a strategy particularly challenging, as many countries around the world are increasingly looking inward, erecting trade barriers and focusing on protecting and growing local industries, much like the Philippines. As a result, global demand for exported goods has declined significantly, negatively impacting export-oriented economies such as Thailand.

Another challenge is that many Philippine regional peers pursuing industrialization strategies do so with a much greater degree of state support. Indonesia is also looking to expand its domestic industry and has set its sights on establishing a foothold in clean energy supply chains. This strategy is explicitly defended by the state through the use of export ban on nickelfor example. The Philippines, which has one of the more market-oriented economies in the region, is unlikely to see the same level of direct state support in pursuing its industrial ambitions.

The Tatak Pinoy Act states that the policy of the state is to “encourage, support and promote the production and provision of Philippine products and services,” while also emphasizing that this should be done in “cooperation with the private sector” and “market driven.” In other words, it creates a strategic mandate to boost domestic production, but it is not a full-throated call for the same kind of state-led industrial policies we see in some other countries.

Will that be enough for the Philippines to build higher value-added connections in domestic and global supply chains? Time will tell, but given the level of state support that competing countries enjoy, and given the increasing protectionist trends in the global economy, it is currently a difficult time to be part of the industrialization and export-led growth sector.