AS a member of the Management Association of the Philippines for a number of years now and a passionate contributor to its Trade and Industry Committee, I cannot help but share some experiences and my afterthoughts from a recently concluded IT Trade Mission to the United States.

The 10-day mission, with its theme as "Philippines: Asia's IT Services Hub," organized by the Department of Trade and Industry was led by no less than the Honorable Trade Secretary Manuel A. Roxas II.

There are notable differences and similarities between this IT mission and other missions to the US, Europe, Australia and New Zealand which I joined over the last 10 years.

One difference was that the delegation came from diverse backgrounds. There were representatives from industries under three categories: IT companies, IT parks, investment bankers/venture capitalists.

Organizing trade and investment promotion for these three categories could have been a real challenge. The target audience (whether potential customers or partners) also had diverse needs and requirements. Competition, opportunities, strengths or threats for each category are different.

One similarity with past missions is the common message from all the participants that foreign IT firms should invest in the Philippines. The Philippines, after all, boasts of strategic location, democratic and stable government, comfortable lifestyle, top quality manpower, liberal and business-friendly economy.

There are, however, expanded incentives for IT/E-commerce investors in various categories:

For service exporters, ecozone/freeport enterprises, the Philippines grants an income tax holiday of between four years and eight years and a special 5 percent tax rate after ITH. These firms also enjoy tax and duty exemption on imported capital equipment, unrestricted use of consigned equipment, additional deduction for training expenses, deduction for labor expenses, exemption from wharfage dues and any export tax, duty, impost and fees, employment of foreign nationals and simplified customs processing.

For those locating their regional operating headquarters in the Philippines, the government charges only a 10-percent tax on taxable income. These are also exempted from contractor's tax, local licenses, fees or charges except real property tax. The government also allows tax and duty-free importation of equipment and materials for training.

Unfortunately, the Roxas delegation had to face the daily news on the Mindanao situation while sharing its message with prospective investors. By the fifth day, the I Love You virus phenomenon hit the front pages of every US newspaper, thus, adding to the negative news.

As the mission went through New York, Washington DC, San Francisco and Los Angeles, I recalled a study conducted in 1992 by the National Computer Center on the Philippine software industry: investment priorities and opportunities. The findings include:

1. The software industry has been identified as one of the priority sectors for Philippine development. Although at that time, it was said to be a fledgling industry, everybody agrees that the sector faces bright prospects for growth, particularly in export markets. The global market for software products and services provides opportunities for producers that could deliver quality products and services;

2. At that time, the Philippine software producers are inhibited from expanding operations because of a number of constraints: lack of qualified manpower, limited access to advanced computing platforms, limited information about market opportunities and limited access to capital;

3. To spur the growth of the industry at that time, a number of key interventions were deemed critical: modernization of telecommunications, strengthening of IT training institutions, marketing Filipino software products and services in foreign markets, implementation of large-scale systems development projects for the local producers to gain hands-on experience.

As I revisit the study, I ask myself whether the Philippine software industry must still be a fledgling industry. Of course, we have seen how foreign investments in IT companies (e.g., Oracle, Microsoft, HP, Sun, IBM, SAP, Baan, etc.) hastened the development process to address some of the issues in items 2 and 3 above.

These include technology transfer, growth of trained manpower especially with the tremendous IT job generation, access to advanced computing platforms, and exposure to large-scale and complex software development and systems integration projects. The government's share in a deregulated (e.g., telecommunications, banking) and liberalized economy also allowed these foreign investments to spur heavy use of IT in their operations in the Philippines.

But as I listen to Secretary Roxas discuss the changing face of Philippine exports, and as he presents the dramatic growth of the semiconductor industry from a mere 23 percent of our exports in 1992 to an outstanding 75 percent of total export volumes in 1999 (US$25.5 billion in value, projected to hit US$30 billion this year), I could only imagine Philippine software getting a significant slice of the export pie.

Can we determine the volume of IT products (?) and services that we export and how much dollar revenues are generated? For some years now, I imagine that in the future we can build software factories in the Philippines and export software parts/templates (similar to chips in the semiconductor industry) to service the world market.

Can you also imagine in the future what it would be like if the Philippines can produce those software like Baan of the Netherlands, SAP of Germany. Or if the Philippines could be like any of those thousands of software products from the US, or produce niche software products like those from Israel, Iceland, even India or Singapore?

Such future could be another major facelift for Philippine exports. But of course, imagining the future is not the same as building it!

The competencies or e-competencies to build the future will include imagination and inventiveness. It is the capability for innovation, branding and translating this knowledge into products, expert services and quality that will move up the Philippines in that "Value Ladder" to ensure long-term competitiveness and higher incomes for the Filipinos. And hopefully give our people a better quality of life that they have long deserved.