1. THE PHILIPPINE ADVANTAGE Secretary Peter B. Favila Department of Trade and Industry

2. PHILIPPINE ECONOMIC SCORECARD  GDP growth of 5.6% ( S2 2006) Agriculture 5.2% - Industry 5.1% - Services 6.1%  Fiscal performance on track Jan to July 2006 revenue collections up by 20% Deficit is PhP B34.1 lower year-on-year  Philippine Peso is one of Asia’s best performing currencies 4-year high bolstered by OFW remittance, exports and portfolio investments  Headline inflation continued to ease at 6.5% (as of July 2006)  Gross international reserves reached an all-time high at US$21.3B (as of July 2006)  Stable and low interest rate environment

3. 2005 Milestones 5.1% GDP growth 3.9% Export growth 149.8% Net FDI growth strong performance continues into 2006... 1 st Semester 2006 5.6% GDP growth 16.8% Export growth 114.6% Net FDI growth FOREIGN TRADE AND INVESTMENT PERFORMANCE

4. Strong export performance is supported by the continuing diversification of merchandise exports … US$ 22.7B Exports in 1 st Semester 2006 Source: DTI-Tradeline (derived from primary NSO data) Top Exports (Jan to Jun 2006)Value (US$B)% Share Electronics14.19662.6 Automotive/Machinery1.2255.4 Garments1.2085.3 Minerals/Petroleum products0.7713.4 Other Consumer and Industrial2.1969.7 Food/Agro-based products2.0889.2

5. Jan-Jun 2006 2000 EXPORT PERFORMANCE BY REGIONAL BLOCS Source: BETP (derived from primary NSO data) … and the rise of new markets and expansion of trade relations.

6. FDI flows remain on the uptrend... FOREIGN DIRECT INVESTMENT, net (US$M) Source: Bangko Sentral ng Pilipinas (BSP)

7. BOI-PEZA Approved Investments by Sector January – June 2006... and investment approvals signal that the growth trend will continue. Total approved investments at US$ 2B in 1 st Semester 2006 Sources: Board of Investments (BOI) and Philippine Economic Zone Authority (PEZA)

8. POLICY DIRECTIONS  Continued fiscal consolidation  Countrywide development through the super regions  Increased infrastructure spending  Clear agenda for competitiveness  Reforms for good governance

9. Macroeconomic achievements are carried through at the operating level...  A more responsive government and a business-friendly environment  Focus on infrastructure development and competitiveness-enhancement  Emergence of new growth industries Renewed investor confidence

10. THE PHILIPPINE ADVANTAGE IN e-SERVICES Location, Location, Location  Strategic location in Asia  Strong infrastructure support  Centrally-located IT parks Supportive Regulatory and Policy Environment  Government priority  Incentives package Significant Impact on Bottomline  Human resource advantage  Efficiency and productivity  Cost savings – IT personnel, real estate, telecoms

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