The Government of the Republic of the Philippines Trade and Investments Secretary Peter B. Favila Department of Trade and Industry The Philippines: Making

The Government of the Republic of the Philippines

Trade and InvestmentsTrade and Investments

Secretary Peter B. FavilaDepartment of Trade and Industry

The Philippines: The Philippines: Making Things HappenMaking Things Happen

Mid-Year Economic BriefingMid-Year Economic Briefing05 September 200605 September 2006


Presentation OutlinePresentation OutlineI. What has been achieved so

far?II. What are the numbers telling

us?III. What is the next wave of policy

agenda?


I. What Has Been Achieved So I. What Has Been Achieved So Far?Far?


Reform breakthroughs at the macro-level are carried through at the micro level . . . A more responsive government and a business-friendly environment Focus on infrastructure developmentEmergence of new growth industries (e.g., mining, logistics, health and wellness and medical tourism, and IT-enabled services)

Renewed investor confidence


II. What Are The Numbers Telling II. What Are The Numbers Telling Us?Us?


Positive Outcomes: Jan-Jun Positive Outcomes: Jan-Jun 20062006

16.8% export growth, topping the 10% export growth target for 2006

885% growth in BOI-PEZA infrastructure/industrial service facilities investments

43% growth in employment in BOI-PEZA investments

The Government of the Republic of the PhilippinesExport growth accelerates with Export growth accelerates with

rebound in global electronics rebound in global electronics demanddemand

Merchandise Exports (US$B)

32.2 35.2 36.2 41.3

19.5 22.7

45.439.7

051015202530354045

2001 2002 2003 2004 2005 Jan-Jun2005

Jan-Jun2006

2006Target

9.5%

10% growth target

9.5%

2.9%

Source: NSO

4.0%

16.8%

2005US$41.26B total exports in 2005, 4.0% growth

Jan-Jun 2006US$22.74B total exports for Jan-Jun 2006, 16.8% growth from the same period in 200510% annual growth target for 2006


Exports reached US$ 22.7B as of June Exports reached US$ 22.7B as of June 2006; showed increasing 2006; showed increasing diversification…diversification…

Source: BETP (derived from primary NSO data)

TOP EXPORTS2000 Jan-Jun 2006

VALUE(in

US$B)

Share (%)

VALUE(in

US$B)

Share

(%)Electronics 26.569 69.8 14.196 62.6Automotive/Machinery 1.335 3.5 1.225 5.4Garments 2.463 6.5 1.208 5.3Minerals/Petroleum Products 0.874 2.3 0.771 3.4Food/Agro/Resource-based Products 2.472 6.5 2.088 9.2

Other Consumer and Industrial Manufactures 2.998 7.9 2.196 9.7


J apan17.6%

U.S.17.6%

E.U.19.3%

ASEAN18.1%

China8.9%

Taiwan3.9%

Hong Kong7.1%

Other Countries

7.4%Japan14.7%

U.S.29.5%

E.U.17.9%

ASEAN15.7%

China1.7%

Taiwan7.5%

Hong Kong5.0%

Other Countries

7.8%

Jan-Jun 2006

2000Export Performance by Regional Blocs

Source: BETP (derived from primary NSO data)

……the rise of new markets and the rise of new markets and expansion of trade relations.expansion of trade relations.


BOI-PEZA Approved Investments by Sector January – June 2006

Total approved investments reached Total approved investments reached P100.25B; infrastructure/industrial facilities P100.25B; infrastructure/industrial facilities capturing the chunkcapturing the chunk

IT Services5%

Others3%

Real Estate, Renting and

Business Activities

8%

Manufacturing18%

Infrastructure/Industrial Facilities

42%

Wholesale & Retail Trade

25%

Sources: BOI and PEZA


III. What Is The Next WaveIII. What Is The Next WaveOf Policy Agenda?Of Policy Agenda?


Market Strategy: ExpansionLink supply-capacity to high impact markets Develop niches for culture-based trade

Product Strategy: DiversificationProductivity-enhancing strategies for Revenue StreamsPromotion of export-oriented investments and SMEsIntensify promotion of services exports

Trade Facilitation

Philippine Export Development Plan 2005-2007

Trade policy engagements to support development objectives


Addressing the development challenge: Widespread wealth creation

2006 Investments Priorities Plan » Full incentives to export enterprises and SMEs» 11 priority areas in 2005 IPP plus cement

Rationalization of fiscal incentivesCompletion of major infrastructure projects RED (Retention-Expansion-Diversification) ProgramImproving the business climate Positioning the Philippines in the regional and global supply chain


Measures to improve Measures to improve competitiveness and governancecompetitiveness and governance

AO 155 (04 Jul 2006), DTI Secretary as the Export Enforcer

Act on behalf of the President on decisions reached by the EDCImplement measures to lower the cost of doing business for exportersCall on all government agencies to implement decisions and impose sanctions on entities that impede efficient exportation of Philippine goods


EO 557 (08 Aug 2006), Anti-Red Tape Task Force

DTI Secretary as ChairMembers: PMS, CICT, DTI, EDC Secretariat, NAPC and PCCI Deliverable: reduce red tape in all government agencies to lower transaction costs


National Competitiveness Summit, 29 Sep 2006Deliverables:

Action agenda: a more competitive Philippines Firm commitments from stakeholders achievable action points


Expected Results in 2006Expected Results in 200610% growth in exports

Growth sectors: automotive, mining, food10% growth or a total of US$5 billion in BOI and PEZA investments

Growth Sectors: manufacturing, IT services, mining, health and wellness and medical tourism, logistics


Managing trade engagements and balancing liberalization commitments given our fiscal situation, development needs and market access objectives WTO - APEC - ASEAN – Bilaterals

Guiding principle: securing policy space while obtaining market access concessions from our trade partners


Creating a more favorable investment climate amidst stiff competition in the region

Export expansion in a moderately growing global market


Trade and InvestmentsTrade and Investments

Secretary Peter B. FavilaDepartment of Trade and Industry

The Philippines: The Philippines: Making Things HappenMaking Things Happen

Mid-Year Economic BriefingMid-Year Economic Briefing05 September 200605 September 2006

Documents

The Government of the Republic of the Philippines Trade and Investments Secretary Peter B. Favila Department of Trade and Industry The Philippines: Making