Arangkada forum presentation by John Forbes

PURPOSE OF FORUM• Observe First Anniversary of Arangkada, launched December 13, 2010• Report on JFC Arangkada activities• Release First Assessment of Arangkada Recommendations• Assemble public and private sector Arangkada partners to energize our advocacy for growth and jobs. Arangkada Press Launch with DTI www.arangkadaphilippines.com

INTERACTIVE FORUM• Send us your questions and comments:  By email, arangkadaph@gmail.com  By handwritten note (in folder) -identify yourself (optional)  By Twitter, @ArangkadaPH  By Facebook, www.facebook.com/arangkadaphilippines• If we can’t answer today, we will after the Forum www.arangkadaphilippines.com

FORUM PROGRAMPart 1: Growing Too Slow • With former Secretary Roberto de OcampoPart 2: Becoming More Competitive • With National Competitiveness Council Private Sector Co-Chair Guillermo LuzPart 3: Seven Big Winner Sectors • With experts moderated by Mr. David CeldranPart 3: Infrastructure • With experts moderated by Ms. Maria RessaPart 4: General Business Environment • With experts moderated by Mr. Coco AlcuazAddress by President Aquino and Open Forum www.arangkadaphilippines.com

ARANGKADA ACTIVITIES• Nearly 70 advocacy dialogue meetings with senior government officials• Website – www.arangkadaphilippines.com (over 15,000 hits in 7 months) from 100 countries• Seven Big Winner Sectors Workshop March 30 and Arangkada Forum January 26• Partnership with National Competitiveness Council• Cooperation with Philippine Business Groups – Legislative Priorities, Memo to President June 30, Letters re Holidays, etc.• First annual Arangkada Anniversary Assessment www.arangkadaphilippines.com

PART 1: GROWING TOO SLOW Real GDP yoy growth rates, ASEAN-6, quarterly, 1q2009-3q2011 Indonesia Vietnam Malaysia 25% Philippines Thailand Singapore 20% 15% 10% 5% PH 0% -5% -10% 1Q-09 2Q-09 3Q-09 4Q-09 1Q-10 2Q-10 3Q-10 4Q-10 1Q-11 2Q-11 3Q-11Sources: Respective national statistics offices www.arangkadaphilippines.com

PART 1: GROWING TOO SLOW FDI, Bn, US$ Singapore Indonesia Vietnam 45 Malaysia Thailand Philippines 40 35 30 25 20 15 10 5 PH 0 -5 -10Source: UNCTAD www.arangkadaphilippines.com

PART 2: BECOMING MORE COMPETITIVE Survey Title Year RP Previous RP ASEAN-6 Trend ranking ranking positionBest Countries for Business 2010 91 of 128 84 of 127 5 of 6 DeterioratedFailed States Index 2011 51 of 177 53 of 177 6 of 6 ImprovedIndex of Economic Freedom 2011 107 of 179 115 of 179 4 of 6 ImprovedWorld CompetitivenessYearbook 2011 41 of 59 39 of 58 5 of 5 DeterioratedInternational Property Rights 2011 87 of 129 80 of 115 6 of 6 ImprovedCorruption Perception Index 2011 129 of 183 134 of 178 6 of 6 ImprovedHuman Development Report 2011 112 of 187 113 of 187 4 of 6 ImprovedE-governance Readiness not yetSurvey* 2012 released 78 of 183 - -Doing Business 2012 136 of 183 134 of 183 6 of 6 Deteriorated not yetInvesting Across Borders* 2012 released 87 countries N/A N/APaying Taxes 2012 135 of 183 124 of 183 5 of 6 DeterioratedGlobal Competitiveness Report 2011 75 of 142 85 of 139 6 of 6 Improved not yetGlobal Enabling Trade Report* 2012 released 82 of 125 - -Travel & TourismCompetitiveness 2011 94 of 139 86 of 133 6 of 6 DeterioratedEnvironmental Performance not yetIndex* 2012 released 50 of 163 - -

PART 3: SEVEN BIG WINNER SECTORSAGRIBUSINESSBUSINESS PROCESS OUTSOURCINGCREATIVE INDUSTRIESINFRASTRUCTURE• POLICY• AIRPORTS• POWER• ROADS AND RAIL• SEAPORTS• TELECOMMUNICATIONS AND INFORMATION• WATERMANUFACTURING AND LOGISTICSMININGTOURISM, MEDICAL TRAVEL, AND RETIREMENT www.arangkadaphilippines.com

PART 4: GENERAL BUSINESS ENVIRONMENTBUSINESS COSTSENVIRONMENT AND NATURAL DISASTERSGOVERNANCEJUDICIALLABORLEGISLATIONMACROECONOMIC POLICYSECURITYSOCIAL SERVICES: EDUCATIONSOCIAL SERVICES: HEALTH AND POPULATIONSOCIAL SERVICES: POVERTY

METHODOLOGY• Almost 50 private sector experts, including several of our panelists• Annual assessment will allow measurement of progress No Longer Relevant Started Backward/Regression Substantial Progress Not Ongoing Completed www.arangkadaphilippines.com

ASSESSMENT SUMMARY 1 star: No 2 stars: 2.5 stars: 3 stars: 3.5 stars: 4 stars: 4.5 stars: 5 stars: 6 stars: Longer Backwa- Backwa- Not Not Started Started – Substan- Comple- Relevant rds/ rds/ Ongoing Ongoing Substan- tial ted Regress- Regressi - Started tial Progress ion on - Not Progress OngoingPart 1: Growing Too Slow 3 5Part 2: Becoming More 3CompetitivePart 3: Seven Big Winner 12 24 1 100 12 105 2 21 6SectorsAgribusiness 1 3 9 5BPO 3 4 7 7 7 2Creative Industries 1 10 4 1Infrastructure Policy 1 3 9 7 3 2 Airports 5 6 2 2 Power 2 5 1 4 9 Roads & Rail 2 3 4 Seaports 14 6 Telecommunications 1 6 3 1 Water 3 6Manufacturing 1 7 3 6Logistics 3 2 9 7 3 1Mining 1 3 13 13 3Tourism, Medical Travel, and 2 1 7 22 2Retirement

ASSESSMENT SUMMARY 1 star: No 2 stars: 2.5 stars: 3 stars: 3.5 stars: 4 stars: 4.5 stars: 5 stars: 6 stars: Longer Backwa- Backwa- Not Not Started Started – Substan- Comple- Relevant rds/ rds/ Ongoing Ongoing Substan- tial ted Regress- Regressi - Started tial Progress ion on - Not Progress OngoingPart 4: General Business 4 22 55 10 75 10 1EnvironmentBusiness Costs 4 1 4 7Environment and Natural 2 3 9DisastersForeign Equity and 3 4 5ProfessionalsGovernance 1 4 3 5 3Judicial 2 4 5 1Labor 2 1 4 1 1Legislation 1 4 8Local Government 3 3 4 5 1Macroeconomic Policy 14 1 13 1Security 5 4 2 4Social Services: Education 7 5 Health & Population 3 4 2 Poverty 2 1 1 TOTAL 16 46 1 158 22 185 2 34 7 3 stars and below: 205 = 45% 3.5 stars and up: 250 = 55%

ASSESSMENT SUMMARY 50% mark Overall Part-1 Part-2 Part-3 3-Agri 3-BPO 3-Creative Industries 3-Infrastructure Policy 3-Airports 3-Power 3-Roads & Rail 3-Seaports3-Telecommunications and Information 3-Water 3-Manufacturing 3-Logistics 3-Mining3-Tourism, Medical Travel & Retirement 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 3 Stars and Below 3.5 Stars and Up

ASSESSMENT SUMMARY 50% mark Part 4 4-Business Cost4-Environment & Nat. Disasters4-Foreign Equity & Professionals 4-Governance 4-Judicial 4-Labor 4-Legislation 4-Local Govt 4-Macroeconomic Policy 4-Security 4-Education 4-Health & Popn 4-Poverty 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 3 Stars and Below 3.5 Stars and Up

ASSESSMENT SUMMARYOverall Rating, percentage Roads and Rail, percentage Tourism, Medical Travel, and Retirement, percentage 5 1 Star 2 6 Stars 1 Star 6% Stars Stars 7% 10% 6% 3% 3 3.5 Stars 3 Stars 5 Stars 2 Stars Stars and up and below 23% 14% 20% 55% 45% 3 Stars 4 4 Stars 23% Stars 23% 65% www.arangkadaphilippines.com

Sample Assessment Part 3: Business Process Outsourcing, p.10 Most of the priority BPO bills have substantially progressed in the Congress. The amendment to the Labor Code Strengthen the industry removing the restriction on women working at night was with a robust legal signed as RA 10151. The DICT bill has been approved by the House on 3rd reading and is pending 2nd Reading in Senate.A. framework, passing five The Data Privacy bill has been approved by the House on 3rd key bills and opposing Reading and is pending 2nd Reading in Senate. The legislation that harms Cybercrime Prevention Act is pending Committee Report in the IT-BPO investment the House, and approved on 2nd Reading in Senate and is a climate. LEDAC priority. Rationalization of Fiscal Incentives passed 3rd Reading in the House and is pending Committee Report in Senate. Substantial Progress www.arangkadaphilippines.com

Sample Assessment Part 3: Infrastructure-Roads and Rail, p.37 Operationalized rail transport improvement projects include the upgraded Bicol PNR line and Buildintercityrail the start of operations of the 4-station MRT-1 and urban light North Extension, both initiated in the previous rail, especially on administration. Other major rail projects remain Luzon, twice as in the planning stage except for the suspendedG. fast. Accelerate controversial PRC-funded Northrail project. DOTC rail construction Sec. de Jesus planned to bid O&M for the Metro on Luzon, using Manila light rail system to the private sector, but PPPs as well as this was shelved by his successor. Delays have DOTCfunds. long plagued the efforts of DOTC to implement rail projects.1 Backwards/Regression www.arangkadaphilippines.com

Investment banks-but not ADB- predict Philippines can be a major economy.Goldman Sachs Asian HSBC Citi (2011) Development (2007) (2012) Bank (2011)

Bank Date of Report Title of Report Growth Projection The N-11: MoreGS March 2007 • 17th largest economy by 2050 Than an Acronym • 6th of 10 by GDP growth, 7.3%, Global Growth 2010-2050Citi February 2011 Generators • 9th of 10 by GDP per capita growth, 5.5%, 2010-2050 Asia 2050: • Philippines, named as an aspiringADB August 2011 Realizing the Asian economy, IF able to move out of Century Middle-Income TrapHSBC January 2012 The World in 2050: • 16th largest economy by 2050 www.arangkadaphilippines.com

Estimated FDI, job creation , taxes ifrecommendations implemented, 2010- 2020

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