1. The Government of the Republic of the Philippines Trade and Investments Secretary Peter B. Favila Department of Trade and Industry The Philippines: Making Things Happen Mid-Year Economic Briefing 05 September 2006

2. The Government of the Republic of the Philippines Presentation Outline I. What has been achieved so far? II. What are the numbers telling us? III. What is the next wave of policy agenda?

3. The Government of the Republic of the Philippines I. What Has Been Achieved So Far?

4. The Government of the Republic of the Philippines 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 development Emergence of new growth industries (e.g., mining, logistics, health and wellness and medical tourism, and IT-enabled services) Renewed investor confidence

5. The Government of the Republic of the Philippines II. What Are The Numbers Telling Us?

6. The Government of the Republic of the Philippines Positive Outcomes: Jan-Jun 2006 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

7. The Government of the Republic of the Philippines Export growth accelerates with rebound in global electronics demand Merchandise Exports (US$B) 9.5% 10% growth target 9.5% 2.9% Source: NSO 4.0% 16.8% 2005 US$41.26B total exports in 2005, 4.0% growth Jan-Jun 2006 US$22.74B total exports for Jan- Jun 2006, 16.8% growth from the same period in 2005 10% annual growth target for 2006

8. The Government of the Republic of the Philippines Exports reached US$ 22.7B as of June 2006; showed increasing diversification… Source: BETP (derived from primary NSO data) TOP EXPORTS 2000Jan-Jun 2006 VALUE (in US$B) Share (%) VALUE (in US$B) Share (%) Electronics26.56969.814.19662.6 Automotive/Machinery1.3353.51.2255.4 Garments2.4636.51.2085.3 Minerals/Petroleum Products0.8742.30.7713.4 Food/Agro/Resource-based Products2.4726.52.0889.2 Other Consumer and Industrial Manufactures 2.9987.92.1969.7

9. The Government of the Republic of the Philippines Jan-Jun 2006 2000 Export Performance by Regional Blocs Source: BETP (derived from primary NSO data) …the rise of new markets and expansion of trade relations.

10. The Government of the Republic of the Philippines BOI-PEZA Approved Investments by Sector January – June 2006 Total approved investments reached P100.25B; infrastructure/industrial facilities capturing the chunk Sources: BOI and PEZA

11. The Government of the Republic of the Philippines III. What Is The Next Wave Of Policy Agenda?

12. The Government of the Republic of the Philippines Market Strategy: Expansion Link supply-capacity to high impact markets Develop niches for culture-based trade Product Strategy: Diversification Productivity-enhancing strategies for Revenue Streams Promotion of export-oriented investments and SMEs Intensify promotion of services exports Trade Facilitation Philippine Export Development Plan 2005-2007 Trade policy engagements to support development objectives

13. The Government of the Republic of the Philippines 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 incentives Completion of major infrastructure projects RED (Retention-Expansion-Diversification) Program Improving the business climate Positioning the Philippines in the regional and global supply chain

14. The Government of the Republic of the Philippines Measures to improve competitiveness and governance AO 155 (04 Jul 2006), DTI Secretary as the Export Enforcer Act on behalf of the President on decisions reached by the EDC Implement measures to lower the cost of doing business for exporters Call on all government agencies to implement decisions and impose sanctions on entities that impede efficient exportation of Philippine goods

15. The Government of the Republic of the Philippines EO 557 (08 Aug 2006), Anti-Red Tape Task Force DTI Secretary as Chair Members: PMS, CICT, DTI, EDC Secretariat, NAPC and PCCI Deliverable: reduce red tape in all government agencies to lower transaction costs

16. The Government of the Republic of the Philippines National Competitiveness Summit, 29 Sep 2006 Deliverables: Action agenda: a more competitive Philippines Firm commitments from stakeholders achievable action points

17. The Government of the Republic of the Philippines Expected Results in 2006 10% growth in exports Growth sectors: automotive, mining, food 10% 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

18. The Government of the Republic of the Philippines 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

19. The Government of the Republic of the Philippines Creating a more favorable investment climate amidst stiff competition in the region Export expansion in a moderately growing global market

20. The Government of the Republic of the Philippines Trade and Investments Secretary Peter B. Favila Department of Trade and Industry The Philippines: Making Things Happen Mid-Year Economic Briefing 05 September 2006