December 13 2010 Arangkada Philippines 2010 Press Conference 12

8/3/2019 December 13 2010 Arangkada Philippines 2010 Press Conference 12

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PRESS CONFERENCEDecember 13, 2010, 9:00am

Audio Visual Room, DTI-BOI Building, Makati

www.InvestPhilippines.info
http://www.investphilippines.info/http://www.investphilippines.info/


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WELCOMING REMARKS

PRESS CONFERENCE

Secretary Gregory Domingo

Department of Trade and Industry


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OVERVIEW

PRESS CONFERENCE

Hubert dAboville

President, European Chamber of Commerce


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Arangkada Philippines 2010 is the JFC Seven BigWinners in great detail, with hundreds of tables, maps,and illustrations, more than 400 pages of text, and 471

recommendations.

It is a gargantuan, collaborative effort, by domestic andforeign groups. Over 300 investors participated over 6months in 9 Focus Group Discussions.

The research forArangkada drew widely on advocaciesof many organizations. We wish to acknowledge theirvital contribution.

Arangkada contains a vision of a Philippines realizingthe full potential of its people and resources andgaining its proper place alongside Southeast Asiasother large middle income economies.


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Accelerating, moving faster, even twice as fast, is the main theme of

Arangkada.

When this happens, we predict at least $75 billion in FDI, 10 new million

jobs, and P1 trillion in new public revenue, can be achieved over a

decade.

The JFC will set up a website www.InvestPhilippines.info where Arangkada

and periodic updates will be available.

The Aquino administration is following new programs that begin to meet

challenges discussed inArangkada. Examples include policies to end

corruption, create a level playing field, improve infrastructure and bid out

PPP projects, review oil/gas, renewable energy and mining contracts to

remove unqualified proponents, revive negotiations of rebel groups, K+12,

expand CCT, open skies, reproductive health, and Universal Health Care.

We applaud these.

Arangkada has four parts (see next slide). My colleagues will briefly

explain each.


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Part 1: Growing Too Slow

Part 2: Becoming More Competitive

Part 3: Seven Big Winner Sectors

Part 4: General Business Environment


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Angelica Esguerra Pettersson

Executive DirectorAustralian-New Zealand

Chamber of Commerce


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Philippine GDP growth has caught up with the ASEAN region.

Philippine growth in 80s/90s was lowest of ASEAN-6. In lastdecade it has improved, reaching close to 7% in 2010.

We believe 9-10% should be the planned target. Twice as fast

(4.6% 2001-mid-2010)

-15%

-10%

-5%

0%

5%

10%

15%

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Vietnam

Indonesia

Philippines

Malaysia

Singapore

Thailand

Sources: IMF


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0%

10%

20%

30%

40%

50%

60%

70%

1990-1995 1996-2000 2001-2003 2004-2006

Philippines

Vietnam

Indonesia

Malaysia

Thailand

Sources: PovcalNet (World Bank); Balisacan, Arsenio "Pathways out of Poverty." 2008; UNICEF for the urban-ruralpopulation distribution in Indonesia

Growth has not trickled down. Poverty remains high.

Philippines has made less progress than others in reducingpoverty. Future growth must be more inclusive.


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Other Challenges

Creating Quality Jobs. Labor force of 38 millionhas increased 50% since 1990 and is projected togrow to 54 million in 2030.

Doubling investment. Philippines FDI inflows are

weakest of ASEAN-6. Domestic investment ratiolowest among ASEAN-6.

Remittances are doubled-edge sword. Theysupport a GDP growth floor, but lead to

complacency to avoid reforms needed to creategood jobs at home.

Increasing and diversifying exports, which areover-dependent on electronics.


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Nobuo Fujii

Vice President

Japanese Chamber of Commerce


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Global competitiveness surveys, ranking of Philippines

Survey Title Years Most recent

RP ranking

ASEAN-6

positionTrend

ASEAN Regional Survey 2003-09 N/A N/A N/A

Best Countries for Business 2008-09 84 of 127 5 of 6 Improved

Failed States Index 2006-09 53 of 177 6 of 6 Deteriorating

Index of Economic Freedom 2001-10 109 of 179 4 of 6 Deteriorating

World Competitiveness Yearbook 2001-10 39 of 58 6 of 6 Improved

International Property Rights 2007-10 80 of 115 4 of 6 Deteriorating

Corruption Perception Index 2001-10 139 of 180 6 of 6 Deteriorating

Human Development Report 2001-10 105 of 182 4 of 6 Deteriorating

E-governance Readiness Survey 2002-10 78 of 183 4 of 6 Deteriorating

Doing Business 2007-10 144 of 183 6 of 6 Deteriorating

Investing Across Borders 2010 87 countries N/A N/APaying Taxes 2008-10 135 of 183 5 of 6 Deteriorating

Worldwide Governance Indicators 2002-09 212 countries N/A N/A

Global Competitiveness Report 2001-10 85 of 139 6 of 6 Deteriorating

Global Enabling Trade Report 2008-10 82 of 125 6 of 6 Deteriorating

Travel & Tourism Competitiveness 2007-10 86 of 180 5 of 6 Stable

Environmental Performance Index 2006-10 50 of 163 2 of 6 Improved


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Part 2 Methodology

Arangkada provides a useful tool to measurecompetitiveness trends over time.

Arangkada:

computed percentile rankings (this is abetter indicator than numerical positionbecause survey coverage increases eachyear);

charted rankings back to 2001 to identifytrends; and

compares the Philippines with ASEAN-6.


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Recommendations: Becoming More Competitive

Undertake aggressive efforts to improverankings much faster.

Identify the competitiveness indicators most

important to investors. Then focus on theirimprovement (e.g. corruption, business costs,infrastructure, regulations, HR quality, politicaland policy stability).

Create a national psychology to improveinternational competitiveness ratings overalland in specific critical areas.


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John D. Forbes

Senior Adviser

Investment Climate Improvement ProjectAmerican Chamber of Commerce


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Numerical summary of FGD

Seven Big Winner recommendations

Big Winner Sector Host Date # Participants #Recommendations

Agribusiness ECCP December 3, 2009 15 18

Business Process Outsourcing PAMURI February 18, 2010 28 30

Creative Industries CanCham November 5, 2010 16 16

Infrastructure Policy Environment AmCham November 26, 2009 25

Infrastructure: Airports AmCham November 12, 2009 38 15

Infrastructure: Power AmCham November 17, 2009 48 21

Infrastructure: Roads and Rail AmCham November 26, 2009 33 9

Infrastructure: Seaports AmCham November 12, 2009 20

Infrastructure: Telecommunications none none 11

Infrastructure: Water AmCham November 17, 2009 9

Manufacturing and Logistics JCCIPI March 11, 2010 35 17 + 25

Mining ANZCHAM November 20, 2009 41 33

Tourism, Medical Travel, and Retirement KCCP September 23, 2009 36 34

Total 290 283


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Key messages: Develop 7 Big Winners Faster

Big Winners can create millions of jobs.

Agribusiness, Manufacturing, and Mining are

the most challenging.

Infrastructure is a critical enabler. Need to

have both hard infrastructure AND progressive

soft infrastructure policies (e.g. open skies,

solicited PPPs, decongest Manila Port, reform

public utilities 60-40 rules).


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Estimated FDI, job creation if recommendations

implemented, 2010-2020


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Henry Schumacher

Executive Vice President

European Chamber of Commerce


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General Business Environment (GBE)

Issue NumberBusiness Costs 16Environment and Natural Disasters 14Foreign Equity and Professionals 12

Governance 16Judicial 12Labor 9Legislation 13Local Government 16Macroeconomic Policy (Fiscal, Markets, Trade) 29Security 15Social Services: Poverty 4

Education 12Health and Population 9

TOTAL 177


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GBE: Critically Important to Growth

Arangkada makes 177 recommendations toimprove the GBE.

GBE is divided into 13 categories, each having

positive or negative impact on growth of theSeven Big Winners.

Every one of the 13 categories is of critical

importance to growth. Moving reforms in each aheadfasteris the

challenge.


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GBE: Some Immediate Challenges

Uncompetitive business costs (labor, holidays, marine

transport, power).

High unemployment and brain drain; low labor productivity.

Restrictions on foreign equity and professionals.

Weak governance (corruption, red tape, smuggling).

Slow judicial processes, weak rule of law.

High taxes yet poor public revenue; large public sector deficit.

Slow pace of legislative reform.

Unclear authorities of local vis--vis national government.

Security (crime, insurgency, terrorism, warlordism, weakmilitary/police).

Insufficient social services (education, health, reproductive

health) reach the poor. Low per capita expenditures.


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OPEN FORUMPRESS CONFERENCE

Moderator

Robert M. Sears

Executive Director

American Chamber of Commerce


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CLOSING REMARKSPRESS CONFERENCE

Undersecretary Cristino L. Panlilio

Managing Head, Board of Investments

Department of Trade and Industries


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PRESS CONFERENCEDecember 13, 2010, 9:00am

Audio Visual Room, DTI-BOI Building, Makati

www.InvestPhilippines.info

December 13 2010 Arangkada Philippines 2010 Press Conference 12

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