Pedp 2008 2010


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Pedp 2008 2010

  1. 1. Proposed Philippine Export Development Plan (PEDP) 2008-2010 (Revised as of 22 July 2008) Presentation to PHILEXPORT GMM, HOTEL SOFITEL July 23, 2008
  2. 2. <ul><li>Framework and Planning Process </li></ul><ul><li>2005-2007 Scorecards </li></ul><ul><li>Global Outlook </li></ul><ul><ul><li>Key Challenges </li></ul></ul><ul><ul><li>Opportunities </li></ul></ul><ul><li>2008-2010 Export Targets </li></ul><ul><li>Strategies </li></ul><ul><li>Policy and Financial Requirements </li></ul><ul><li>Implementation </li></ul>Contents of the Plan
  3. 3. <ul><li>Part 1. Framework and Planning Process </li></ul><ul><li>Framework </li></ul><ul><li>Medium Term Philippine Development Plan (MTPDP) 2004-2010 as updated for 2008-2010 </li></ul><ul><li>Philippine Export Development Plan (PEDP) 2005-2007 </li></ul><ul><li>B. Planning Process </li></ul><ul><li>Workshops on Global Trends and Strategy Formulation </li></ul><ul><li>Visioning Session </li></ul><ul><li>Sectoral Value Chain Analysis </li></ul><ul><li>Regional Consultations </li></ul><ul><li>Focus Group Discussions </li></ul>
  4. 4. Part 2: PEDP 2005-2007 Scorecards Philippine Export Performance vs Targets US$B Sources: NSO, BSP, EDC 43.72 47.45 46.07 53.33 53.85 58.2 58.75
  5. 5. Philippine Export Growth Rates vs Targets Sources: MTPDP 2004-2010,BSP,NSO as processed through BETP-managed TRADELINE Part 2: PEDP 2005-2007 Scorecards… cont. %
  6. 6. Selected ASEAN Export Performance 2003-2006 (in US $B) Part 2: PEDP 2005-2007 Scorecards… cont. Source: Trademap; ASEAN Secretariat
  7. 7. <ul><li>Export growth remained positive </li></ul><ul><li>2006 surge in intra-regional trade with China and the rest of Asia </li></ul><ul><li>Peso reduced export revenues the following year </li></ul> 2005 2006 2007 RP 4 14 6 ASEAN 5* 19 16 35 Global 14 16 15 Sources: MTPDP 2004 – 2010, National Statistics Office,  Trademap; WTO ; ASEAN Secretariat * Indonesia, Malaysia, Singapore, Thailand & Vietnam Comparative Merchandise Exports Growth (%) Part 2: PEDP 2005-2007 Scorecards… cont.
  8. 8. 2005 2006 2007 RP 12 42 31 Global Commercial Services 12 12 18 Comparative Services Exports Growth (%) <ul><li>Growing contribution of commercial services exports to total trade. </li></ul><ul><li>Booming BPO services continue to lead growth. </li></ul>Part 2: PEDP 2005-2007 Scorecards… cont. Sources: Bangko Sentral ng Pilipinas WTO
  9. 9. Overall balance in market shares Part 2: PEDP Scorecards, cont. Major Markets of RP Merchandise Exports % 2007 US$ 50.3B
  10. 10. RP Merchandise Exports to the World Source: National Statistics Office Part 2: PEDP 2005-2007 Scorecards… cont.   Product Group   2007 Value US$M Growth % Share % Electronics 31,023 16 63 Garments & Wearables 2664 -9 5 Machinery and Transport 2,748 9 5 Food 1,476 13 3 Home Furnishing 1,215 7 2 Marine Prods 584 25 1 Mineral Products 2,548 21 5 Petroleum 1,108 21 2 Metal components 481 20 1 Coconut 944 25 2 Others 5,479 6 11
  11. 11. Part 2: PEDP 2005-2007 Scorecards… cont. Policy Measures put in place for better business environment Legend: Accomplished On-going; need to accelerate No action so far Policy Measures Milestones/Updates Streamlined and Automated Procedures Export clearance fees eliminated (17 agencies compliant. Others are not due to their charter provisions) ASYCUDA World e-Customs Project is delayed Export Clearance procedures not yet fully computerized Infrastructure Improvements Supported moves for completion of priority infrastructure projects GenSan Fishport improved and compliant to EU standards Export wharfage fees reduced on April 20, 2007 - December 31, 2007. Request for extension ignored
  12. 12. Part 2: PEDP 2005-2007 Scorecards… cont. Legend: Accomplished On-going; need to accelerate No action so far Policy Measures Milestones/Updates Export Training & Skills Enhancement DepEd: Teachers retraining on going in English, Math and Science in basic education DOST, TESDA, CITC: Trainings for revenue streams conducted (additional training needed) CHED and TESDA and universities: Ladderization program being implemented Legislative Amendments R.A. 9501 - Amendment of Magna Carta for MSMEs approved (IRR being drafted) Amendment of Customs Brokers Act (3rd Reading, HOR) Anti Smuggling Bill (1st Reading, HOR & Senate) Funding Sources for Export Promotion Php 10.5 M grant from BSP for export promotion (90.5% utilized) Export Promotion Fund P280 M, from DTI, BSP, DBM, NEDA and PHILEXPORT. (Will be fully obligated by 3rd Qtr, 2008) Access of SMEs of GFI financing facilities increased
  13. 13. Part 3. Global Outlook, 2008-2010 <ul><li>Historic credit crisis </li></ul><ul><li>Record-high oil prices </li></ul><ul><li>Heightened inflation fears </li></ul><ul><li>Perhaps even the beginning of a recession…??? </li></ul>
  14. 14. <ul><li>Part 3. Global Outlook, 2008-2010 </li></ul> Actual Markets 2007 2008 2009 2010 World 3.7 2.7 3.0 3.4 USA 2.2 1.1 1.9 2.5 European Union 2.6 1.7 1.5 1.9 Japan 2.0 1.4 1.6 2.1 China 11.9 9.4 9.2 9.0 India 8.7 7.0 7.5 8.0 ASEAN 10.0 9.7 9.6 Sources: Global Economic Prospects 2008 International Monetary Fund, 2008 Asian Development Bank, Development Outlook, 2008 World Bank, July 2008 Global Outlook (GDP, in %) Moderate global growth expected
  15. 15. <ul><li>Part 3. Global Outlook, 2008-2010 </li></ul>Sources: Global Economic Prospects 2008 International Monetary Fund, 2008 Asian Development Bank, Development Outlook, 2008 World Bank, July 2008 <ul><li>Moderate global growth expected at best </li></ul><ul><li>Contraction imminent due to surging oil and food prices </li></ul><ul><li>Slower growth in high-income countries </li></ul><ul><li>Developing-country imports now driving global growth. </li></ul><ul><li>Asia’s growth track is more stable than the rest of the world </li></ul>
  16. 16. Part 3. Global Outlook…cont. A. Key Challenges <ul><li>Market Access </li></ul><ul><ul><li>ASEAN integration </li></ul></ul><ul><ul><li>EU expansion </li></ul></ul><ul><ul><li>Emerging markets </li></ul></ul><ul><li>2. High Cost of Inputs to Exports </li></ul><ul><li>3. Rising Cost of Crude Oil </li></ul><ul><li>4. Uncertainties in the Peso-US Dollar Rate </li></ul><ul><li>5. High Cost of Doing Business </li></ul><ul><li>6. Inadequate training opportunities to respond to growing demand for RP human resources </li></ul>
  17. 17. <ul><li>B. Key Opportunities </li></ul><ul><ul><li>Deepening economic integration of ASEAN region </li></ul></ul><ul><ul><li>Additional market access arising from ASEAN plus partners </li></ul></ul><ul><ul><li> (i.e. China, Korea, Australia, New Zealand, and Japan) </li></ul></ul><ul><ul><li>Emerging markets like India, South Africa, and Eastern Europe including Russia, Turkey and Ukraine, among others. </li></ul></ul><ul><ul><li>Increased oil revenue-driven spending in the Middle East </li></ul></ul>Part 3. Global Outlook…cont.
  18. 18. 2008 Export Industry Projections Part 4. 2008-2010 Exports Targets… cont. Sector Growth in % Electronics 0 Garments & Textile 2 Fashion Accessories 11 Machinery & Transport 18-24 Mineral Products 5 Processed Food & Beverages 2 Fresh Fruits & Vegetables 5 Marine Products 10 Home Furnishings 15 Giftwares & decors 2 Metal Components 20 Petroleum Products 12 ICT Services 39
  19. 19. Part 4. 2008-2010 Export Targets Growth in services exports to outpace merchandise exports 84.4 15 73.2 14 64.2 8 - 9 58.8 TOTAL 23.4 40 16.7 40 11.9 35 – 40 8.5 Services 61.0 8 56.5 6 53.3 4 - 6 50.3 Goods Value US$B Growth % Value US$B Growth % Value US$B Growth % Value US$B 2010 2009 2008 2007 (Actual)‏
  20. 20. Growth in services exports to outpace that of merchandise… Part 4. 2008-2010 Exports Targets 64.2 73.2 84.4
  21. 21. Part 4. 2008-2010 Exports Targets… cont. <ul><li>Revenue Streams as Sources of Growth </li></ul><ul><li>Goods </li></ul><ul><li>Automotive Parts </li></ul><ul><li>Electronics* </li></ul><ul><li>Food* </li></ul><ul><li>Homestyle Products </li></ul><ul><li>Minerals* </li></ul><ul><li>Natural & Organic Products (non-food) </li></ul><ul><li>Textile, Apparel, Footwear, Travelgoods </li></ul><ul><li>Services </li></ul><ul><li>ICT </li></ul><ul><li>Construction* </li></ul><ul><li>Emerging Services* </li></ul><ul><ul><li>Health & Wellness </li></ul></ul><ul><ul><ul><li>Medical Tourism </li></ul></ul></ul><ul><ul><ul><li>Wellness/ Spa </li></ul></ul></ul><ul><ul><ul><li>Retirement </li></ul></ul></ul><ul><ul><li>Logistics </li></ul></ul><ul><ul><li>Entertainment </li></ul></ul><ul><ul><li>Education </li></ul></ul>* Focus of more resources
  22. 22. 1. Market Strategies a. Geographical Markets b. Culture-based Markets 2. Product Strategies a. Build up competitor intelligence to enhance product differentiation b. Initiate “export branding” consciousness among exporters 3. Enterprise Strategies a. Enhance export capacity of enterprises b. Expand business towards more aggressive export promotion 4. Policy and Legislative Agenda to empower exporters Part 5. Strategies
  23. 23. <ul><li>5. Policy and Legislative Strategies </li></ul><ul><li>a. Trade Facilitation </li></ul><ul><ul><ul><ul><ul><li>Seriously implement the streamlining and automation of trade procedures and government transactions </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Accede to the Revised Kyoto Convention </li></ul></ul></ul></ul></ul><ul><li>b. Strengthening of Resources </li></ul><ul><ul><ul><ul><ul><li>Pursue Energy Self-Sufficiency </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Modernize the Agriculture Sector </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Involve Academic and Research Institutions </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Improve Statistical and Data Systems for Trade </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>National Innovation Policy and IPR </li></ul></ul></ul></ul></ul>Part 5. Strategies… cont.
  24. 24. <ul><li>c. Credit and Financial Support for Micro, Small & Medium Exporters </li></ul><ul><ul><ul><ul><ul><li>Reach out to more MSMEs to access Financing Programs of Government Financial Institutions </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Increase the Export Promotion Fund </li></ul></ul></ul></ul></ul>Part 5. Strategies… cont.
  25. 25. Export Promotion Fund Part 5. Strategies… cont. For every US $1 = US $ 40 increase exports (spent by TPOs) According to ITC/World Bank economists: PEDP Total Exports Target in 2008 is with incremental of US$5.27B in goods (net of electronics) and services Following this standard, we actually need US $117M or around PhP 5.3B this year alone EDC will be asking only PhP1B per year as Export Promotion under PEDP 2008-2010 * 1US$ = Php 45
  26. 26. Thank You
  27. 27. <ul><li>Market Access Issues </li></ul><ul><li>Need to address constitutional and legal issues that could endanger full realization of benefits offered by FTAs and EPAs </li></ul><ul><li>ASEAN FTA requires RP SMEs to adjust to demands of an open economy </li></ul><ul><li>Developed country markets continue to impose stringent product standards as it is becoming more concerned with health, bio-terrorism and environment </li></ul><ul><li>Intensified demand for more economic efficiency and productivity initiatives as RP taps new markets and strengthens existing ones </li></ul><ul><li>More sophisticated security requirements </li></ul>
  28. 28. <ul><li>High Cost of Inputs to Exports </li></ul><ul><li>The spate of oil price hike has triggered high commodity prices. </li></ul><ul><li>Insufficient supply of raw materials pushed prices up </li></ul><ul><li>Logistical constraints, particularly transportation, also drove up costs of </li></ul><ul><li>commodities </li></ul><ul><li>Increasing salary rates of employees, especially in the services sector. </li></ul>
  29. 29. <ul><li>Rising Cost </li></ul><ul><li>of Crude Oil </li></ul><ul><li>High world oil prices put pressure on inflation adversely affecting production costs </li></ul><ul><li>Hinders industries to expand production while forces some </li></ul><ul><li>to close shops </li></ul><ul><li>RP ranks 2 nd most expensive electricity rates in ASEAN </li></ul>US$/bbl. Source: Illinois Oil and Gas Association IOGA
  30. 30. <ul><li>Uncertainties in the Peso-US$ Rate </li></ul><ul><li>Peso had the most rapid appreciation in 2003-2007 among Asian currencies </li></ul><ul><li>Export sector significantly affected by a stronger local currency </li></ul><ul><li>Peso started depreciating March 2008 amid lofty oil prices and </li></ul><ul><li>high local prices </li></ul><ul><li>But RP exports seen to remain weak despite rise in peso-dollar rate </li></ul><ul><li>due to lower global demand </li></ul>
  31. 31. <ul><li>High Cost of Doing Business </li></ul><ul><li>RP ranked 133 out of 178 economies in Doing Business 2008, involving </li></ul><ul><li>number of steps and documentation requirements, processing time </li></ul><ul><li>and fees </li></ul><ul><li>Slow automation of BOC and export clearance functions of agencies </li></ul><ul><li>Inconsistencies in the implementation of procedures and policies </li></ul><ul><li>in the Regions </li></ul>
  32. 32. <ul><li>Inadequate training to respond to growing demand for RP human resources </li></ul><ul><li>Domestic demand for human resources needs a sustainable pool of manpower </li></ul><ul><li>World expects larger movement of professionals and highly skilled labor in ICT, medicine, education, navigation, engineering, communication and entertainment fields </li></ul>