Investment Grade Philippines: Seizing Opportunities to Achieve Inclusive Growth

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Investment Grade Philippines:
Seizing Opportunities to Achieve Inclusive Growth

Investment Grade Philippines: Seizing Opportunities to Achieve Inclusive Growth

  1. 1. 0 Investment Grade Philippines: Seizing Opportunities to Achieve Inclusive Growth September 2013
  2. 2. 1 Table of Contents I. Macroeconomic Performance and Outlook........................................ Real Sector................................................................................... Monetary, External and Financial Sectors.................................... Fiscal Sector • Revenue Collection and Debt Management........................... • Expenditure Management....................................................... II. Sectoral Performance and Outlook.................................................... Trade, Industry and Investments.................................................. Agriculture and Fisheries.............................................................. Tourism......................................................................................... Infrastructure • Energy..................................................................................... • Road Transport and Flood Management................................ • Airports, Seaports and Mass Transport Systems.................... • Public-Private Partnership....................................................... III. Philippines Sovereign Credit Ratings: Journey to Investment Grade. IV. Profiles of Speakers and Panel Discussants...................................... V. Directory of Economic Agencies......................................................... VI. Investor Relations Office Brochure..................................................... 2 3 17 29 42 54 55 73 89 110 127 138 144 153 166 187 190
  3. 3. 2 I. Macroeconomic Performance and Outlook
  4. 4. 3 Real Sector Secretary Arsenio M. Balisacan National Economic and Development Authority
  5. 5. 4 2012 H1 2012 H1 2013 GDP Growth 6.8% 6.4% 7.6% By Industrial Origin Share to GDP Growth Rate Share to GDP Growth Rate Share to GDP Growth Rate Agri, Fishery, Forestry and Hunting 11.1 2.8 10.9 0.9 10.2 1.4 Industry 32.0 6.8 32.1 5.6 33.0 10.6 Of which: Manufacturing 22.1 5.4 22.1 5.1 22.6 9.9 Services 56.9 7.6 57.1 8.0 56.8 7.1 By Expenditure Household Final Consumption 70.4 6.6 69.1 6.7 67.7 5.3 Gov’t Final Consumption 10.3 12.2 11.5 13.2 12.3 15.3 Capital Formation 18.5 (3.2) 15.6 (15.7) 18.5 27.3 Of which: Fixed Capital 20.3 10.4 19.8 5.6 20.8 12.7 of which: Public Construction 1.8 29.8 1.9 50.2 2.4 36.2 Private Construction 6.4 11.5 5.6 (4.9) 6.2 17.4 Durable Equipment 10.0 8.0 10.2 6.2 10.2 7.9 Changes in Inventory (1.8) (333.8) (4.2) (1583.0) (2.3) 41.2 Exports 48.4 8.9 53.0 10.3 45.8 (7.0) Imports 47.6 5.3 49.0 3.3 45.2 (0.7) Source: National Statistical Coordination Board The Philippine Economy Sustained Robust Growth in H1 2013
  6. 6. 5 Low and Stable Inflation (%) Sound Macroeconomic Fundamentals Supported this Remarkable Performance 8.2 5.7 4.4 3.5 3.0 2.9 2.2 1.93.6 3.7 4.8 0.2 4.2 3.7 2.1 3.5 17.6 17.5 15.7 15.5 15.8 16.9 17.6 18.4 0.0 4.0 8.0 12.0 16.0 20.0 0.0 2.0 4.0 6.0 8.0 10.0 2005 2006 2007 2008 2009 2010 2011 2012 NPL Ratio, LHS Real interest rates, RHS CAR, RHS Sustainable Fiscal and External Position (%) * As of June 2013 * As of Q1 2013 68.5 61.4 53.9 54.7 54.8 52.4 50.9 51.0 49.5 -2.6 -1.0 -0.2 -0.9 -3.7 -3.5 -2.0 -2.3 -0.9 -4.0 -3.5 -3.0 -2.5 -2.0 -1.5 -1.0 -0.5 0.0 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 2005 2006 2007 2008 2009 2010 2011 2012 2013* NG Debt to GDP (LHS) Fiscal Balance to GDP (RHS) Favorable Interest Rate and Sound Banking System (%) 52.7 44.1 37.1 31.3 32.6 30.1 27.0 24.1 22.8 1.9 4.4 4.8 2.1 5.6 4.5 3.2 2.9 5.3 - 1.0 2.0 3.0 4.0 5.0 6.0 0.0 10.0 20.0 30.0 40.0 50.0 60.0 2005 2006 2007 2008 2009 2010 2011 2012 2013* External Debt to GDP, lhs Current Account to GDP, rhs 6.5 5.5 2.9 8.3 4.2 3.8 4.6 3.2 2.8 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 2005 2006 2007 2008 2009 2010 2011 2012 2013* Headline Inflation Low-end Target High-end Target *Jan - Aug 2013 Note: High and low-end targets are based on the BSP publication on Inflation Targeting dated March 2013; Actual inflation figures are based on the 2006 CPI series.
  7. 7. 6 Moody's Upgraded to Ba1(July 25, 2013)/Rating under Review for Upgrade Fitch Upgraded to BBB -(March 27, 2013)/ Stable S&P's Upgraded to BBB-(May 2, 2013)/Stable Our Competitiveness also Increased Global Competitiveness Index (GCI) Report Country 2013-2014 GCI Ranking 2012-2013 GCI Ranking 2011-2012 GCI Ranking Singapore 2 2 2 Malaysia 24 25 21 Brunei 26 28 28 Thailand 37 38 39 Indonesia 38 50 46 Philippines 59 65 75 Vietnam 70 75 65 Cambodia 88 85 97 Source: World Economic Forum
  8. 8. 7 6.8-7.2% Unemployment Rate 6.8% (2012) 7.6% (HI 2013) Real GDP Growth 20.3% (2012) 20.8% (HI 2013) Fixed Capital as ratio to GDP 7.0% (2012) 7.3% (ave. of LFS’ 2013 Jan, Apr & Jul round) Unemployment rate 27.9% (H1 2012) 28.6% (H1 2009) Poverty Rate Where are we now? Philippine Development Plan Targets by 2016 7-8% Gross Domestic Product 22% Investment/GDP ratio Poverty Incidence down to 16.6% (Millennium Development Goal: 2015) We are on Track with Respect to our Economic Targets; the Present Challenge is to Improve Social Outcome Targets
  9. 9. 8 Source: Labor Force Survey, National Statistics Office Particularly Employment Generation Indicator Ave 2010 Ave 2012 Ave 2012 (Jan, Apr & Jul) Ave 2013 (Jan, Apr & Jul) Labor Force Level (‘000) 38,893 40,426 40,424 40,972 Employment Level (‘000) 36,035 37,600 37,577 37,978 Wage and salary workers (% share to total employment) 54.5 57.2 57.1 58.6 Unemployment Level (‘000) 2,859 2,826 2,847 2,994 Unemployment Rate (%) 7.4 7.0 7.0 7.3 Underemployment Level (‘000) 6,762 7,514 7,632 7,509 Underemployment Rate (%) 18.8 20.0 20.3 19.8
  10. 10. 9 64.08.9 12.8 14.3 NCR, Reg III and IV Other Luzon Visayas Mindanao 2011 2012 And Poverty Reduction to Achieve Inclusive Growth First Semester Poverty Incidence Among Population (%) *Philippine Development Plan Target Source: National Statistical Coordination Board 28.8 28.6 27.9 16.6 0 5 10 15 20 25 30 35 S1 2006 S1 2009 S1 2012 FY 2015 64.08.9 12.8 14.3 64.18.8 12.7 14.4 Poverty Incidence Among Population by Region (%) *
  11. 11. 10 Good governance has proven to be an effective platform upon which strategies should be implemented Macroeconomic (fiscal, financial, external) and political stability fuels positive expectations that lead to growth Economic growth is necessary but not sufficient for poverty reduction Growth strategies need to have spatial and sectoral dimensions to ensure inclusivity Disasters can negate the gains and even push back development For the Midterm Assessment of PDP 2011-2016, We are Taking Stock of Lessons Learned in the past 3 years
  12. 12. 11 Infrastructure development focusing on connectivity between regions/provinces, especially transport and power New growth drivers outside NCR (agri/agribusiness, tourism, IT/BPM in next wave cities, public housing, manufacturing, infra/logistics) Investment in human capital to improve the competitiveness/ productivity of current and future stock of the labor force Provision of social protection against income and employment shocks for the most vulnerable Improved resilience to natural disasters Thus, Positive Actions with Sectoral and Spatial Dimensions will be Undertaken to Achieve Inclusive Growth
  13. 13. 12 We also Have our Priority Sectors to Support Inclusive Growth Philippine Development Plan 2011 - 2016 PDP Midterm Update Priority Sectors Agribusiness/Agriculture Manufacturing Housing Infrastructure/Logistics Tourism Midterm Assessment
  14. 14. 13 2012 Actual H1 2013 Actual 2013 Target 2014 Target GDP Growth (%) 6.8 7.6 6.0-7.0 6.5-7.5 Agriculture Growth (%) 2.8 1.4 3.5-4.5 3.2-4.2 Industry Growth (%) 6.8 10.6 6.4-7.5 7.4-8.5 Services Growth (%) 7.6 7.1 6.3-7.3 6.7-7.6 Source: National Economic and Development Authority as approved by the Development Budget Coordinating Committee Given these Concrete Strategies, We are Confident that Growth will Continue in 2013 and Beyond
  15. 15. 14 Strong performance of agri-based manufacturing, and recovery of semiconductor and electronics Robust public and private construction projects Buoyant domestic and local tourism Continued strong growth of wholesale and retail trade Real estate particularly housing as overseas Filipinos and BPOs continue to drive the property sector Greater productivity in agriculture and rebound of the fisheries subsector Production Expenditures Higher public construction and investments in power generation Robust private investment in construction and durable equipment Strong household consumption due to better employment opportunities, strong remittance inflows, and low and stable inflation Increased tourist arrivals and more demand for business process management Improvement of external trade conditions Supported by the Following Growth Drivers
  16. 16. 15 Weather disturbances (e.g., Typhoons, prolonged monsoon rains) Delays in the implementation of infrastructure development projects, particularly power Excessive capital inflows/outflows Uncertainty of economic recovery in the Euro area and Japan Tapering of monetary stimulus in the US Further economic slowdown in BRIC, particularly China Possible spike in commodity prices (e.g., petroleum) We also Remain Vigilant Against the Following Near-term Global and Domestic Risks to Growth…
  17. 17. 16 Improvement in the global economic environment – Sustained consumption growth in emerging markets Demographic transition – Rising middle-income class, continued growth of working-age population Increased economic integration of ASEAN member countries – Open flow of goods, services, labor, technology, finance More financial resources available – Fiscal space – Investment credit-rating expected to reduce borrowing costs …while Taking Advantage of Opportunities
  18. 18. 17 Monetary, External and Financial Sectors Governor Amando M. Tetangco, Jr. Bangko Sentral ng Pilipinas
  19. 19. 18 Policy Impact Monetary Sector Maintained the BSP's key policy interest rates at 3.5 percent for the overnight borrowing or reverse repurchase (RRP) facility and 5.5 percent for the overnight lending or repurchase (RP) facility. Kept reserve requirement ratios steady. Rationalized the Special Deposit Account (SDA) facility by reducing SDA rates by a total of 150 basis points to 2.0 percent, imposed uniform rates across all tenors and fine tuned access of banks and trust department/entities to the SDA facility. Price stability and non-inflationary growth External Sector Further liberalized existing foreign exchange (FX) regulations; new rules aim to further simplify FX transactions of the general public with banks. Adopted a number of macro prudential regulations, including guidelines on non-deliverable forwards (NDF) transactions involving the Philippine Peso. Strong external position and stable foreign exchange rate Financial Sector Strengthened the capacity of the banking system to endure shocks through the issuance of guidelines for the adoption of the Basel III capital adequacy standards for universal and commercial banks. Continued to take the lead in promoting financial inclusion with programs and reforms aimed at fostering greater access to financial services. Continued to champion financial learning and consumer protection. Efficient, sound, competitive and inclusive financial sector Policy/Reform Milestones and Their Impact
  20. 20. 19 YTD= 2.9% July ‘13 = 2.5% 0 2 4 6 8 10 12 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Headline Lower bound of target Upper bound of target Monetary Policy Settings Remain Supportive of Non-Inflationary Growth Prudent monetary policy has been effective in safeguarding price stability Headline Inflation vs. Target (%) 2002- Aug 2013 Previous rate cuts working their way through the economy RRP Rate and Actual Lending Rate (%) Jan 2009– Aug 2013 Aug’13: 2.1% Jan-Aug ’13: 2.8% 0 2 4 6 8 10 12 Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul 2009 2010 2011 2012 2013 RRP Rate Average bank lending Rate Jul 2013: 5.9% Aug 2013: 3.5%
  21. 21. 20 83.2 12.0 0 2 4 6 8 10 12 14 0 10 20 30 40 50 60 70 80 90 2004 2005 2006 2007 2008 2009 2010 2011 2012 End- Aug'13 GIR (lhs) Import Cover (rhs) Current Account: 3.4 -3000 -1000 1000 3000 5000 7000 9000 11000 13000 15000 2004 2005 2006 2007 2008 2009 2010 2011 2012 Q1 2012 Q1 2013 Capital & Fin'l Account Current Account Balance of Payments 59 60.2 22.8 0 10 20 30 40 50 60 70 50 52 54 56 58 60 62 64 2004 2005 2006 2007 2008 2009 2010 2011 2012 Q1 2012 Q1 2013 External debt in US$ billion (lhs) External debt as % of GDP (rhs) Robust External Position Despite Lingering Global Economic and Financial Uncertainties BOP Position and Current Account remain in surplus Balance of Payments, (US$ Million) Foreign exchange reserves continue to build up Gross International Reserves, (US$ Billion) External debt-to-GDP ratio declines significantly External Debt (US$ Billion) and External Debt/GDP (%) 24.1
  22. 22. 21 NOTE: • Starting January 2013, TLP and NPL of banks are computed as prescribed under BSP Circular No. 772. Gross NPL represents the actual level of NPL without any adjustment for loans treated as “loss” and fully provisioned. • Under the new computation, latest data available is for U/KBs only. 2012: 17.3 2012: 18.4 13 14 15 16 17 18 19 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 CAR solo CAR consolidated * 2001-2011 data is on the Philippine Banking System; available data for 2012 is on U/KBs. Sound and Stable Banking System 1,822 4,19217.1 2.5 0 2 4 6 8 10 12 14 16 18 0 500 1000 1500 2000 2500 3000 3500 4000 4500 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Total Loans Portfolio (LHS) NPL Ratio (RHS) May-12 May-13 TLP (Php Bn) 3,282 3,685 Gross NPL Ratio (%) 3.2 2.8 Net NPL Ratio (%) 0.5 0.4 Quality of loan portfolio continues to improve Total Loans Portfolio (Php Million) and Non-performing Loans Ratio (%) (Philippine Banking System) Bank capitalization remains above regulatory standards and international norms Capital Adequacy Ratio (Philippine Banking System)*
  23. 23. 22 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Mar'13 No. of banking offices No. of ATMs State of Financial Inclusion in the Philippines Improving overall physical network of Philippine banks Number of Banking Offices and ATMs 2001 – March 2013 Expanding number of branches and ATMs from 2009 to March 2013, especially in MIMAROPA and selected regions in Mindanao Regional Growth Rates (%) in the Number of Banking Offices and ATMs, 2009 – March 2013 -40 -20 0 20 40 60 80 100 120 140 NCR IlocosRegion CagayanValley CentralLuzon CALABARZON MIMAROPA Bicol WesternVisayas CentralVisayas EasternVisayas ZamboangaPeninsula NorthernMindanao DavaoRegion SOCOSKSARGEN Caraga CAR ARMM Growthrate(%) Growth in the number of banks Growth in the number of ATMs
  24. 24. 23 1. Prudent monetary policy Inflation 3.2 percent 2.8 percent (Jan-Aug) 4 ± 1 percent 2. Robust external position Balance of Payments (BOP) US$9.2Bn (Jan-Dec 2012) US$3.7Bn (Jan-Jul 2013) US$4.4Bn Gross International Reserves (GIR) US$83.8Bn (End-Dec 2012) US$83.2Bn (End-Aug) US$87.0Bn External Debt-to-GDP ratio 24.1 percent (End-Dec 2012) (End-2011: 26.9 percent) 22.8 percent (Q1 2013) Decreasing 3. Sound and stable financial system Capital Adequacy Ratio (CAR), consolidated basis (U/KBs) 18.4 percent (End-2012) (End-2011: 17.7 percent) n.a. Increasing Non-Performing Loans (NPL) ratio (banking system) 2.5 percent (End-2012) (End-2011: 2.9 percent) n.a. Decreasing ACTUAL TARGET/ FORECAST 2012 2013 2013 BSP’s Performance
  25. 25. 24 Enhancing Corporate Governance Revised existing regulations on corporate governance in line with international best practices such as the “Principles for Enhancing Corporate Governance” issued by the Basel Committee on Banking Supervision Amended the guidelines strengthening BSP’s governance standards to rationalize the definition/qualifications of an independent director and the composition of the members of board-level committees Amended the regulations on the confirmation of the election/appointment of directors/officers of banks with a rank of senior vice president (SVP) and above to simplify the confirmation procedures Amended the Manual of Regulations for Banks (MORB) and the Manual of Regulations for Non-Bank Financial Institutions (MORNBFI) on the familial restrictions applicable to an independent director to align the said restrictions with the existing provisions of the Securities Regulation Code
  26. 26. 25Section Title No. 1 in the world in microfinance regulatory environment (2009-2012) Implemented the enhanced rules on true and transparent lending practices Updated Anti-Money Laundering Rules and Regulations Widened range of products (i.e., micro-agri loans, housing microfinance loans, micro-deposits and microinsurance, etc.) Policy, Regulation and Supervision Financial Education and Consumer Protection Data and Measurement Financial Inclusion Advocacy Established Economic and Financial Learning Centers (EFLC) in 21 BSP regional branches Institutionalized the Financial Consumers Affairs Group (FCAG) to provide avenue for complaints resolution and redress. Worked toward a systematic collection of financial inclusion data for informed policy-making Mapped out financial service access points: – Banking offices went up by 25 percent to 9,442 as of March 2013 from 7,585 in 2001 – ATM network accelerated by 227 percent to 12,700 as of March 2013 from 3,882 in 2001 Sustained leadership in global financial inclusion initiatives Continued work on sharing knowledge and experience in financial inclusion with international peers Spearheaded the implementation of the Credit Surety Fund (CSF) – As of 7 August 2013, 27 CSFs in various provinces have been organized Ensured the smooth flow of remittances through the use of PhilPass REMIT System – Since its implementation in 2010 (up to June 2013), the PhilPaSS- REMIT System has processed 1,006,773 transactions with a corresponding value of Php39.18Bn Intensifying Efforts toward Financial Inclusion
  27. 27. 26 a/ Based on projections adopted by the Development Budget Coordinating Committee (DBCC) on 3 July 2013 b/ Based on BSP projections presented during the Monetary Board meeting on 16 May 2013 1/ Cash remittances coursed through banks p/ revised Actual Projections 2012 2013 2013 GDP Growth (%, 2000=100) 6.8 7.6 (H1) 6.0 – 7.0 a/ Headline Inflation (%, 2006=100) 3.2 2.8 (Jan-Aug) 3.0 – 5.0 a/ Exports Growth (%) Based on the BPM6 concept Based on NSO data 20.9 7.9 7.9 (Q1) -3.4 (Jan-Jul) 11.0 a/ Imports Growth (%) Based on the BPM6 concept Based on NSO data 11.3 2.7 -8.2 (Q1) -3.8 (Jan-Jun) 13.0 a/ OF Remittances 1/ Amount (US$ Bn) Growth Rate 21.4 6.3 10.7(Jan-Jun) 5.6 22.5b/ 5.0 b/ Current Account (US$ Bn) 7.1 3.4 (Q1) 7.0 b/ Balance of Payments (US$ Bn) 9.2 3.7 (Jan-Jul) 4.4b/ GIR (US$ Bn) 83.8 83.2 (end-Aug) 87.0 p/ Macroeconomic Outlook for 2013
  28. 28. 27 Key Risks to Inflation Downsize risks: Uncertainty over the strength of the global economy and its impact on international commodity prices Upside risks: Likelihood of higher electricity rates Continued strong liquidity growth
  29. 29. 28 Monetary sector External sector Financial sector Sustain an appropriate monetary policy stance consistent with the BSP’s primary mandate of promoting price stability conducive to sustained economic growth Continue to carefully scan the operating environment with a forward-looking perspective to move in a pre-emptive fashion to address risks to price stability Maintain market- determined exchange rate Keep comfortable level of reserves Continue to promote external debt sustainability Continue to undertake steps to strengthen the domestic financial system and help manage financial stability risks Sustain advocacies on microfinance, financial inclusion, consumer protection and economic and financial education BSP Policy Directions
  30. 30. 29 Revenue Collection and Debt Management Secretary Cesar V. Purisima Department of Finance
  31. 31. 30 Revenues Grew Faster than Nominal GDP While nominal GDP grew 8.9% in 2012, total revenues and tax revenues rose faster at 12.9% and 13.2%, respectively In Php Bn 2011 2012 Growth Rate Actual Program Actual (2012/2011) Total Revenues 1,359.9 1,560.6 1,534.9 12.9% Tax Revenues 1,202.1 1,427.4 1,361.1 13.2% BIR 924.1 1,066.1 1,057.9 14.5% BOC 265.1 347.1 289.9 9.3% Non-Tax Revenues 157.9 131.2 165.5 5.5% BTr Income 75.2 61.8 84.1 11.8% Expenditure 1,557.7 1,839.7 1,777.8 14.1% Surplus / (Deficit) (197.8) (279.1) (242.8) 22.8% % of GDP -2.0% -2.6% -2.3% Source: Bureau of the Treasury
  32. 32. 31 Lower than Programmed Deficit for H1 2013 Revenues were boosted by the implementation of the Sin Tax Law In Php Bn 2012 Jan-Jun 2013 Jan-Jun Growth Rate (2013/2012)Actual Program Actual Total Revenues 760.9 861.0 839.5 10.3% Tax Revenues 671.5 791.4 746.3 11.1% BIR 521.2 620.3 593.7 13.9% BOC 143.4 163.9 145.1 1.2% Other Offices 6.9 7.2 7.5 8.8% Non-Tax Revenues 89.4 69.7 93.1 4.2% BTr Income 50.2 31.6 49.5 -1.4% Expenditure 795.4 945.7 890.8 12.0% Surplus/(Deficit) (34.4) (84.7) (51.3) 49.2% Source: Bureau of the Treasury
  33. 33. 32 Improved Fiscal Position …through a combination of improved tax effort, reduction in interest cost and more efficient expenditure 2009 Actual 2012 Actual 2013 Adjusted Tax effort (% of GDP) 12.2% 12.9% 13.5% BIR effort 9.3% 10.0% 10.5% BOC effort 2.7% 2.7% 2.9% Others 0.1% 0.1% 0.1% Expenditure (% of GDP) 17.7% 16.8% 16.7% Deficit (% of GDP) -3.7% -2.3% -2.0% Interest payments (% of GDP) 3.5% 3.0% 2.8% Interest payments (% of Expenditure) 19.6% 17.6% 16.8% Source: Bureau of the Treasury
  34. 34. 33 Impact of the Sin Tax Law Implementation Excise tax revenue collections from alcohol and tobacco increased by 46.1% in the first half of 2013 Excise Tax Collections Based on Actual Payments Jan - Jun Growth Rate (In Php Bn) 2012 2013 (2013/2012) TOBACCO 14.6 22.4 53.1% ALCOHOL 11.8 16.2 37.3% TOTAL 26.4 38.5 46.1% The significant increase in collections came even with an equally significant drop in the volume of cigarettes and alcohol produced in the market. Source: Department of Finance *Numbers may not add up due to rounding off Sin tax law was implemented starting January 2013
  35. 35. 34 Achieved Investment Grade from Major International Rating Agencies S&P Upgraded to BBB-/Stable from BB+ (May 2, 2013): INVESTMENT GRADE Fitch Upgraded to BBB-/Stable from BB+ (March 27, 2013): INVESTMENT GRADE Moody’s Ba1/“Rating Under Review for Upgrade” (July 25, 2013) R&I JCRA BBB-/Positive from BBB-/Stable (August 2, 2013): INVESTMENT GRADE Upgraded to BBB/Stable from BBB-/Positive (May 7, 2013): INVESTMENT GRADE The improvement in the fiscal health of the economy is one of the reasons cited by major credit rating agencies in upgrading the Philippines’ sovereign credit rating to Investment Grade
  36. 36. 35 Tightening of Credit Default Swap (CDS) Levels Investor confidence in Philippine obligations is now ranked closer to Thailand than Indonesia Marked decline in average CDS spreads after upgrade: 127.9 94.5 Even as CDS began to track upwards after Bernanke’s May 22 Statement 50 75 100 125 150 175 200 225 250 275 300 8/6/2012 10/6/2012 12/6/2012 2/6/2013 4/6/2013 6/6/2013 Indonesia Philippines Thailand Fitch Upgrade S&P Upgrade Bernanke Statement Source: Bureau of the Treasury *Rating Under Review Source: S&P, Fitch, Moody’s Credit Rating S&P Fitch Moody’s Philippines BBB- BBB- Ba1/RUR* Thailand BBB+ BBB+ Baa1 Indonesia BB+ BBB- Baa3
  37. 37. 36 Impact of Investment Grade Rating on Private Sector Access to cheaper borrowings to finance expansion For the first 7 months of 2013, nine (9) local corporations already raised a total of: US$1.8Bn from offshore markets US$1.8Bn from offshore markets Php48.5Bn from domestic markets Php48.5Bn from domestic markets Benefits to certain corporations: Globe Megaworld & SMC • 7-year peso bond for a 4.8875% coupon issued on July 17, 2013 (down from 6.000% issued on a 7-year bond in June 2012) • 10-year dollar bonds for coupons lower than 5% (4.25% & 4.875%, respectively) issued in April 2013
  38. 38. 37 2013 Outlook Deficit to go down to 2.0% of GDP in line with the fiscal sustainability program In Php Bn 2012 2013 Growth Rate Actual Adjusted (2013/2012) Total Revenues 1,534.9 1,745.9 13.7% % of GDP 14.5% 14.7% Tax Revenues 1,361.1 1,607.9 18.1% % of GDP 12.9% 13.5% BIR 1,057.9 1,253.7 18.5% BOC 289.9 340.0 17.3% Other Offices 13.3 14.2 6.8% Non-Tax Revenues 165.5 136.0 (17.8%) BTr Income 84.1 57.7 (31.3%) Privatization 8.3 2.0 (76.0%) Expenditure 1,777.8 1,983.9 11.6% Surplus/(Deficit) (242.8) (238.0) (2.0%) % of GDP -2.3% -2.0% Source: Department of Finance
  39. 39. 38 In Php Bn 2013 2014 Growth Rate Adjusted Proposed (2014/2013) Total Revenues 1,745.9 2,018.1 15.6% % of GDP 14.7 15.1 Tax Revenues 1,607.9 1,879.9 16.9% BIR 1,253.7 1,456.3 16.2% BOC 340.0 408.1 20.0% Other Offices 14.2 15.5 9.2% Non-Tax Revenues 136.0 136.1 0.1% BTr Income 57.7 56.2 -2.6% Privatization 2.0 2.0 0.0% Expenditure 1,983.9 2,284.3 15.1% % of GDP 16.7 17.1 Surplus/(Deficit) (238.0) (266.2) 11.8% % of GDP -2.0 -2.0 2014 Fiscal Program The new budget is in line with the medium-term fiscal deficit program of 2.0% of GDP in 2014 Source: Department of Finance
  40. 40. 39 Prudent Liability Management NG Financing Program …focused on increasing domestic source of funds 56 66 65 84 89 87 44 34 35 16 11 13 0% 20% 40% 60% 80% 100% 2009 2010 2011 2012 2013 Emerging 2014 Program Foreign Domestic share(in%) GG Debt/GDP ...lower than NG Debt/GDP ratio 54.8 52.4 50.9 51.5 44.3 43.5 41.4 40.6 30 40 50 60 2009 2010 2011 2012 % to GDP NG Debt GG Debt For 2014, we are planning a Php1.0Bn issuance offshore to re- price ROP credit after investment grade rating. The country ’ s improving debt profile is even more pronounced using the international debt indicator of general government (GG) debt/GDP ratio. Increasing reliance on domestic financing sources and improved debt sustainability Source: Bureau of the Treasury, Department of Finance Source: Bureau of the Treasury, Department of Finance
  41. 41. 40 Consolidated Public Sector Deficit …to remain low at 0.8% of GDP in 2014 due to lower NG deficit and improved GFI and LGU performance (241.4) (355.8) (175.1) (163.3) (158.3) (83.5) (100.8) -3.1 -4.0 -1.8 -1.5 -1.3 -0.7 -0.8 -5.0 -4.0 -3.0 -2.0 -1.0 0.0 1.0 -500.0 -400.0 -300.0 -200.0 -100.0 0.0 100.0 2009 2010 2011 2012 2013 BESF 2013 Revised 2014 BESF %ofGDP PhpBillion Source: Department of Finance GFI – Government Financial Institution LGU – Local Government Unit
  42. 42. 41 Full implementation of RA 10351 (Sin Tax Law) Existence of Fiscal Intelligence Unit Measures in Place Other Initiatives Heightened collections from: Self-employed Estate Taxes Revenue Enhancement Measures Anti-smuggling strategies: Port accreditation Import Mapping Audit of oil companies Trade statistics reconciliation Rolling import plan BIR BOC DOF Legislative Agenda Fiscal Incentive Rationalization Tax Incentive Management and Transparency Act (TIMTA) Customs Modernization Act Valuation Reform Act Fiscal Regime for Mining Industry Focus to ensure that positive momentum in government fiscal finances continue
  43. 43. 42 Expenditure Management Secretary Florencio B. Abad Department of Budget and Management
  44. 44. 43 Assessment of the Latest Economic Performance Resurgence in public spending has contributed to the growth of our domestic economy GFCE Growth, Public Construction Growth and GDP Growth (in %) 2.1 12.2 15.3 -39.5 29.8 36.2 -10.0% -8.0% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% -50.0% -40.0% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 2011 2012 2013 S1 GFCE Public Construction GDP *GFCE – Government’s Final Consumption Expenditure
  45. 45. 44 NG Disbursement Performance, January to June 2013 Amount Percent 760.9 839.5 78.5 10.3 48.1 795.3 890.8 95.4 12.0 44.9 CURRENT OPERATING EXPENDITURES 659.5 730.5 70.9 10.8 46.0 Personnel Services 255.3 282.9 27.6 10.8 45.3 Maintenance and Other Operating Exp. 114.9 145.0 30.1 26.2 45.6 Subsidy 12.8 11.1 (1.7) (13.2) 24.6 Allotment to LGUs 109.3 120.9 11.6 10.6 50.0 Interest Payments 150.0 157.1 7.1 4.8 47.3 Tax Expenditures 17.3 13.5 (3.8) (22.0) 50.0 CAPITAL OUTLAYS 124.1 163.7 39.6 31.9 43.0 Infrastructure/Other Capital Outlays 88.3 125.5 37.2 42.2 41.4 Equity 0.9 0.3 (0.6) (63.1) 25.3 Capital Transfers to LGUs 35.0 37.9 2.9 8.4 49.7 NET LENDING 11.6 (3.4) (15.1) (129.6) (23.7) SURPLUS/DEFICIT (34.4) (51.3) (16.9) 49.2 21.5 H1 2012 Actual 2012 vs. 2013 As % of Full-Year Program H1 2013 Actual Increase/(Decrease) REVENUES Levels (Php Bn) DISBURSEMENTS PARTICULARS *Numbers may not add up due to rounding
  46. 46. 45 NG Fiscal Outlook, FY 2013 2012 2013 2012 2013 Actual Adjusted Actual Adjusted REVENUES 1,534.9 1,745.9 14.5 14.7 13.7 DISBURSEMENTS 1,777.8 1,983.9 16.8 16.7 11.6 CURRENT OPERATING EXPENDITURES 1,411.0 1,588.4 13.4 13.3 12.6 PS 542.6 624.4 5.1 5.2 15.1 MOOE 256.7 317.9 2.4 2.7 23.8 Subsidy 42.1 45.0 0.4 0.4 6.8 Allotment to LGUs 218.6 241.8 2.1 2.0 10.6 Interest Payments 312.8 332.2 3.0 2.8 6.2 Tax Expenditures 38.1 26.9 0.4 0.2 (29.4) CAPITAL OUTLAYS 339.3 381.0 3.2 3.2 12.3 Infra & Other CO 250.8 303.4 2.4 2.6 21.0 Equity 21.3 1.3 0.2 0.0 (93.8) Capital Transfers to LGUs 67.2 76.3 0.6 0.6 13.5 NET LENDING 27.4 14.5 0.3 0.1 (47.1) SURPLUS/(DEFICIT) (242.8) (238.0) (2.3) (2.0) (2.0) Particulars Levels (Php Bn) Percent of GDP Growth Rate *Numbers may not add up due to rounding Stronger bias towards more productive expenditures (MOOE and CO)
  47. 47. 46 2012-2013 2013-2014 Roads and Bridges 84,218 108,097 144,443 28.4 33.6 Basic Educational Facilities* 11,012 26,268 45,626 138.5 73.7 Flood Control/Seawalls 11,331 16,536 34,069 45.9 106.0 Housing 10,518 23,203 16,317 120.6 (29.7) National Irrigation 24,193 22,212 16,172 (8.2) (27.2) Farm-to-Market Roads 4,868 5,657 12,603 16.2 122.8 Health Facilities Enhancement Program 5,078 13,558 9,037 167.0 (33.3) Electrification 4,941 6,374 9,679 29.0 51.8 Airports/Air Navigational Facilities 802 5,195 9,014 547.8 73.5 Other Public Works 15,120 1,321 5,092 (91.3) 285.4 Water Supply 1,583 3,335 4,503 110.7 35.0 Preliminary and Detailed Engineering 780 1,724 3,026 121.0 75.5 Land Transportation/Railways 116 6,661 1,642 5,633.5 (75.3) Ports and Lighthouses 679 2,373 1,377 249.6 (42.0) Quick Response Fund 1,383 1,150 1,305 (16.8) 13.5 Others 39,113 51,043 85,529 30.5 67.6 Total Infrastructure Outlays 215,735 294,708 399,432 36.6 35.5 Source: Department of Budget and Management * Inclusive of School Building Program 2012 Actual 2013 GAA 2014 Proposed Levels (Php Mn) Particulars Growth Rate (%) Major Government Spending Initiatives Ramped-up investments for public infrastructures
  48. 48. 47 Major Government Spending Initiatives Key investments for poverty reduction and equitable access to basic social services K-12 Program Passed into law on May 15, 2013 Increase DepED Budget from Php238.8Bn in 2012 to Php293.4Bn in 2013 to cover the construction /rehabilitation of classrooms (21,488) and teachers (61,510) Expansion of household beneficiaries in 2013 from 3.1Mn to 3.8Mn Further expansion to cover 4.4Mn households in 2014 to include street families and indigenous peoples Conditional Cash Transfer Program Universal Health Care Program Sin Tax Law passed to provide Php23.97Bn in 2013 and Php29.78Bn in 2014 Ongoing formulation of IRR by DOH, DOF and DBM Tertiary Education Technical Vocational Education The Php1.4Bn proposed budget for the Training for Work Scholarship Program for 2014 is twice the Php700Mn provided in 2013. The proposed budget is intended to subsidize 163,300 enrollees CHED implemented the Students’ Grants-in-Aid Program for Poverty Alleviation (SGP-PA) to increase the number of higher education graduates from poor households For academic year 2012-2013, 4,041 students have benefited under the SGP-PA Prioritize approval of course/program offerings driven by the requirements of the market such as the BPOs and Tourism Industry
  49. 49. 48 Budget by Sector, FY 2003-2014 Continued significant increase in resources committed to Social and Economic Services along with a significant decline in Debt Service Percent Share of Total Budget
  50. 50. 49 Expenditure Management Reforms Tighter Alignment with Priorities 2010: Zero-Based Budgeting & Evaluation of Major Programs 2011: Alignment of Budget with 5 Social Contract KRAs 2012: Program Budgeting Approach & Groups of Agencies Working on Common Objectives 2013: Budget Prioritization Framework 2010: Disaggregation of Lump Sum Funds 2011: Procurement Innovations (Early Procurement & Expansion of Philippine Government Electronic Procurement System (PhilGEPS) 2012: Account Management Teams 2013: One-Year Validity of Appropriations 2014: The Budget as Release Document Faster Budget Execution Performance Budgeting 2011: Review of OPIF to Refine Outputs, Performance Indicators and Budget 2011: Started Results-Based Performance Management System 2012: Performance-Based Incentive System and Grant of Bonuses according to Contribution to Organizational Targets 2013: Performance-Informed Budgeting Transparency and Participation in the Budget Process 2010: Government-CSO Principles of Constructive Engagement 2011: Mandatory Disclosure Provisions (2012: Transparency Seal) 2011: National Government Agencies-Civil Service Organization (NGA-CSO) Budget Partnerships 2011: Use of Technology for Transparency (PDAF webpage, BudgetNgBayan.Com, etc.) 2012: Bottom-Up Budgeting Significant expenditure management reforms have been initiated to implement the government’s commitment towards a strong and healthy fiscal position over the medium-term
  51. 51. 50 Moving Towards Performance-Informed Budgeting Enabled by Organizational Performance Indicator Framework (OPIF) Consistent with Results-Based Performance Management System Empowers Performance Delivery via Office of the Cabinet Secretary Outcomes Program Priorities Department Outputs Inputs (PAPs)* Performance Indicators With the Performance Informed Budget or PIB, each peso is presented alongside the outcomes and outputs that we spend for *PAPs – Programs, Activities, Projects
  52. 52. 51 Inclusive Development and Employment Generation Promoting a New Business Model Government Support to Enterprise Development for 2014 Driven by Communities and Small Entrepreneurs Enabled by Micro Finance and NGOs Businesses Enlightened by Shared Value Promotion and Development of Small and Medium Industries – Php750Mn Shared Service Facilities – Php770Mn Coconut Industry Development such as the Smallholder Oil Palm Plantation Development Project and Agro-Industrial Hubs Project – Php2.0Bn Supply of Services, Infrastructure Facilities and Equipment for Fishery Industry –Php2.3Bn The government, through the budget, seeks to promote a new business model
  53. 53. 52 Medium-Term Fiscal Program, FY 2012-2016 REVENUES 1,534.9 1,745.9 2,018.1 2,388.4 2,814.0 % of GDP 14.5 14.7 15.1 16.1 16.9 Growth Rate 12.9 13.7 15.6 18.4 17.8 DISBURSEMENTS 1,777.8 1,983.9 2,284.3 2,685.4 3,146.1 % of GDP 16.8 16.7 17.1 18.1 18.9 Growth Rate 14.1 11.6 15.1 17.6 17.2 Current Operating Expenditures 1,393.0 1,558.5 1,736.5 1,895.6 2,060.1 Of which: Interest Payments 312.8 332.2 352.7 383.6 421.1 Capital Outlays 357.3 410.9 522.9 766.5 1,062.7 Of which: Infrastructure Outlays 2/ 237.3 299.4 418.2 601.5 834.5 % of GDP 2.2 2.5 3.1 4.0 5.0 Growth Rate 23.4 26.1 39.7 43.8 38.7 Net Lending 27.4 14.5 25.0 23.3 23.3 DEFICIT (242.8) (238.0) (266.2) (297.0) (332.1) % of GDP (2.3) (2.0) (2.0) (2.0) (2.0) Source: Department of Finance, Department of Budget and Management, National Economic and Development Authority 2/ Includes NG Infrastructure Outlays, GOCCs Infra Subsidy and LGU Infra Transfer. The LGU Infra Transfer estimates were computed by using the average increase of LGU Land and Land Improvements, Buildings, Public Infrastructure and Construction in Progress 1/ Subject to revision based on changes in macroeconomic assumptions and other factors Particulars Levels (PHP Bn) 2016 Projection 1/ 2015 Projection 1/ 2014 Proposed 2013 Adjusted 2012 Actual Infrastructure spending to grow from 2.5% of GDP in 2013 to 5.0% in 2016
  54. 54. 53 Aquino’s Legacy: Ensuring the Irreversibility of Reforms Institutionalization Deeply embed reforms in the policies, systems and processes of government (including legislation and leveraging technology) Reform Constituency Build a strong constituency – CSOs, communities, private sector, etc. – to provide constant support and demand for reforms Concrete Dividends Ensure that reforms lead to concrete benefits to people, so that the reversal of beneficial reforms will be politically and economically costly By the time its term ends in 2016, the Aquino Administration seeks to leave behind a legacy of sustained good governance. Here are the strategies being employed to ensure the irreversibility of reforms:
  55. 55. 54 II. Sectoral Performance and Outlook
  56. 56. 55 Trade, Industry and Investments Secretary Gregory L. Domingo Department of Trade and Industry
  57. 57. 56 Improved Business Environment Attracted More Investments BOI – PEZA Approved Investments (Php Bn) Agency 2011 2012 Jan-Jun 2012 2013 % Growth BOI 368.93 360.35 165.51 201.90 22.0 PEZA 288.34 311.95 43.61 83.69 91.9 TOTAL 657.27 672.30 209.13 285.59 36.6 Total BOI-PEZA approved investments increased by 36.6% in H1 2013 70,936 jobs to be generated 79.0% or Php159.5Bn of BOI-registered investments (Php201.9Bn) is in the energy sector to help build the country’s capability to supply the much needed power requirements of domestic enterprises 44.6% or Php37.3Bn of PEZA’s Php83.7Bn approvals is in the real estate sector, followed by accommodation and food service (26.3% or Php22.0Bn), and manufacturing (19.8% or Php16.6Bn). Big ticket projects: MCE Leisure (Philipines) Corporation; Petron Corporation; Bac-man Geothermal, Inc.; Robinsons Land Corporation; Megaworld Corporation; SM Prime Holdings, Inc.; Boracay Seascapes Resort, Inc.; Travellers International Hotel Group, Inc.; Hedcor Sabangan, Inc.; Cebu Air, Inc. Source: Board of Investments
  58. 58. 57 Improved Business Environment Attracted More Investments Robust Performance in H1 2013 BOI-PEZA Approved Investments by Industry Share in % BOI-PEZA Approved Investments by Source Value in Php billion 43.6 20.6 9.3 6.0 2.2 1.5 1.5 7.1 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0 Source: Board of Investments Source: Board of Investments Electricity, Gas, Steam & Air Conditioning Supply, 55.9% Real Estate Activities, 22.2% Accommodation & Food Service Activities, 9.2% Manufacturing, 7.0% Administrative Support Service Activities, 2.2% Others, 3.6%
  59. 59. 58 Continued Increase in Foreign Investments into the PH Continued Increase in Foreign Investment Inflows into the PH based on BOI-PEZA Approved Projects from 2011-2013 (SH) BOI-PEZA Approved Investments An Upward Trend in the Number of Registered Regional Operating Headquarters (ROHQ)/Regional Headquarters (RHQ) No. of Registered ROHQs/RHQs and its Growth (%) Year Value (Php Bn) Amount of Approved Foreign Investments % Share of Foreign Investments % Growth in Foreign Investments 2011 657.27 218.91 33.31% 2012 672.30 282.45 42.01% 29.03% H1 2012 209.13 38.49 18.40% H1 2013 285.59 91.91 32.18% 138.79% Year Number of Registered ROHQs/RHQs % Growth 2010 20 2011 25 25% 2012 37 48% Del Monte Corporation's (USA) US$60Mn in Maguindanao for its 3,000-hectare banana plantation that will employ 4,500 workers Holcim's (Switzerland) additional investment of US$400-US$450Mn for a new cement plant Fomento Económico Mexicano Sociedad Anónima's (FEMSA) (Mexico) acquisition of Coca Cola Bottling Corporation Philippines in the amount of US$688.5Mn representing 51% of the company's total value of US$1.35Bn Itochu's (Japan) buy-out of Dole Food Company in the amount of US$1.685Bn Source: Board of Investments Notable Foreign Investments in 2012 and 2013
  60. 60. 59 BOI-PEZA facilitated the inbound missions of 567 companies/organizations (225 individual company/ agency visits; 198 multi-company/delegations, representing 342 companies/organizations), accounting for 78% of total IPA-facilitated investment missions of 731 (preliminary data) for H1 2013. Realized Projects – From the inbound visits, 6 projects amounting to US$87.2Mn have already been realized estimated to create 1,500 jobs. Three (3) projects are positive leads. Main Sectors of Interest of Firms – Main Sectors: information technology and business process management (IT–BPM), manufacturing, energy, construction, automotive, mining – Other Sectors: garments, electronics, tourism, oil and gas, shipbuilding and aerospace Countries of Origin – Interest coming from European countries and sustained interest from the USA, topped the country of origins of the visits in PH in H1 2013, followed by Japan, India, Australia, and Malaysia. Strong Investor Confidence on Domestic Business Climate Stronger Inflow of Inbound Delegation and Company Visits Proactive support of our Philippine Embassies and Foreign Trade Posts The continued positive perception and sustained business confidence of the global business community on the present administration and the economy The prevailing economic crisis in US & Europe which paved the way for investors to look at other regions, particularly Asia as the next hot destination for business opportunities. Sustained Investor Confidence BOI-Facilitated Investment Inbound Missions
  61. 61. 60 Merchandise Exports Gradually Recovering Philippine Export Performance (January to June 2013) PH’s merchandise exports heading towards a gradual recovery – PH merchandise exports amounted to US$25.59Bn in the first semester of 2013. – A gradual recovery can be gleaned from the reduced level of contraction at 4.5% in the year-to-date (YTD) exports, aided substantially by the 15.6% month-on-month (MOM) growth of electronics exports in June 2013. Top Exports – Electronics remained PH’s top export at US$10.1Bn and comprised 39.42% of total PH exports. – Non-electronic exports contributed 55.3% of PH’s total merchandise exports, posting US$15.5Bn and growth of 7.6%. Top Markets – Japan remained the PH’s top export market, with exports up by 8.8%. – Other export markets that also posted positive growth for the first half of the year were Malaysia (44.5%) and Korea (34.5%). Top Export Markets H1 2013 In US$ billion H1 2013 Exports In US$ billion 4.0 3.7 4.3 4.0 4.9 4.5 1.5 1.5 1.8 1.6 1.7 2.0 2.5 2.3 2.6 2.4 3.2 2.5 0.0 1.0 2.0 3.0 4.0 5.0 6.0 Jan Feb Mar Apr May Jun Total Exports Electronics Non-Electronics Source: Board of Investments
  62. 62. 61 Current Bright Spots in Exports *Adjusted as of 18 July 2013. Growth targets as approved by Export Development Council in September 2012 are unchanged; details may not add up to totals due to rounding off. ** Actual export data as adjusted by the National Statistics Office and Bangko Sentral ng Pilipinas Export Outlook for 2013 ACTUAL** TARGETS 2011 2012 2013 2014 2015 2016 Value (in US$ Bn) Growth Value (in US$ Bn) Growth Value (in US$ Bn) Growth Value (in US$ Bn) Growth Value (in US$ Bn) Growth Value (in US$ Bn) Growth Total Merchandise 48.3 -6.2 52.1 7.9 60 15 69 15 79 15 91 15 Total Services 17.9 26.7 18.6 4.2 21 15 23 10 26 10 29 10 TOTAL EXPORTS 66.2 0.9 70.7 6.9 81 15 92 14 105 14 120 14 Agricultural Crops (e.g., banana, pineapple, mango), which are exported either as fresh or processed into foods and beverages, are doing well internationally (more than 30% growth in January-May 2013). Seaweed Products are gaining more foothold in China, despite competition from Indonesia, as seaweed derivatives now have wider application in manufacturing industries like supplements, binding, stabilizers, and coagulants. Coconuts are no longer limited to being used for conventional products as new products have evolved and are best- selling in the US, Europe and Asia, such as: coconut flour, milk substitutes, virgin coconut oil (VCO), coco water drinks and coco water concentrates, and coconut oils. Wood-Based Products (e.g., creative basketwork, wickerwork and natural fibers) continue to be noticed internationally given the wider market access for vegetable plaiting materials and accents. Export Targets: 2013 -2016*
  63. 63. 62 Export Outlook for 2013 Industry leaders maintain a positive outlook for the rest of the year with year-end export growth projections up to 11%. Foreseen recovery in volume for electronics, pricing in mineral products, substantive digit growth in machinery and transport equipment exports, and sustained double-digit positive performance of agro-based products are the primary factors. The final tale-of-the-tape will depend also on anticipated economic recovery in advanced economies and the continued growth of emerging market economies. Reuters’ recent poll of 250 economic analysts showed that U.S. recovery will pick up some momentum in the second half of the year, just as the euro zone economy steadies itself after more than a year in recession. After a year and a half of recession, Europe’s battered economy could finally be showing signs of life later this year, e.g., the German index of business confidence rose for the third month in a row while surveys of purchasing managers in the euro area indicate manufacturing activity edged back into growth territory in July for the first time in 18 months. As far as electronics is concerned, our local companies and PEZA locators need to continue to shift products from being intermediate inputs into more assembled international consumer brands and strengthen domestic brands in smartphones and tablets. Progress in achieving the free movement of goods aspect of the ASEAN Economic Community (AEC) 2015 has been largely achieved. Attention is now focused on non-tariff barriers and trade facilitation measures. At the same time, we continue to maximize trade opportunities offered by our ASEAN dialogue partners. Improved productivity is essential for the Philippines to compete with low-cost neighbouring economies, and additional steps are needed to promote more competition, improve human capital, eliminate limitations on foreign investment, reduce incentives, and reform state-owned institutions. With the Government's public-private partnerships underway, new investments in major infrastructure projects to lessen costs on inter-island transportation are encouraged.
  64. 64. 63 Policy Interventions to Support Exports Creation of the Networking Committee (NC) on ASEAN Economic Community (AEC) 2015 – The Export Development Council (EDC) created the NC on AEC 2015 that aims to prepare exporters to take full advantage of the opportunities offered by AEC while addressing the competitive challenges of integrating into the regional and global economies. Pushing for the Amendment of the Cabotage Law – EDC, for the past three Congresses now, has been working for the amendment of the Cabotage Law, identified as one of the root causes of high shipping cost, a barrier to domestic and foreign trade, especially for Philippine micro, small and medium exporters. – President Aquino, in his 2013 State of the Nation Address, pronounced his support to the amendment of certain sections of the Tariff and Customs Code of the Philippines and the Domestic Shipping Development Act of 2004 as filed by Cagayan de Oro Representative Rufus Rodriguez through House Bill 1789. Continue Streamlining Processes for Permits, including Reducing Fees of Key Regulatory Agencies such as Food and Drug Administration (FDA) – The increase in fees in FDA, ranging from 900% to 4,000%, heavily burdens the already struggling food, cosmetics and drug industries, based on EDC’s analysis. This renders PH products uncompetitive not only in the world market, but also on the domestic front, especially in the face of the coming ASEAN Economic Integration in 2015. It is also seen to negatively affect the Philippines’ competitiveness ranking due to the high cost and longer time in the processing of permits and licenses. EDC recommends the conduct of a public hearing where all stakeholders, especially SMEs, will be able to air their side and for FDA to explicate the increase in fees and respond to other issues that need to be addressed. Harmonize the guidelines on the Gross Vehicle Weight (GVW) and the axle existing load policy. – EDC-NC on Transport and Logistics sees the adverse effect of implementing the policy primarily on the increase in cost and delay/inefficiency in the delivery of export goods. Opening and Expanding market Access for Philippine exports – Engage actively in the negotiations for SEAN Regional Economic Partnership (RCEP) – Negotiate FTA with the European Union – Prepare to negotiate entry into the Trans-Pacific partnership Agreement (TPP) Apply for European Union Generalized Scheme of Preferences (GSP+) Program for Preferential Tariff Actively advocate for renewal of United States Generalized Scheme of Preferences (GSP)
  65. 65. 64 60 DBFTA sessions were conducted and attended by 6,522 participants representing 3,134 companies. These sessions, which focused on exporting to FTA partners of the Philippines, were held in the National Capital Region (NCR), Region I, III, IV-A, VI, X and ARMM. Doing Business in Free Trade Areas (DBFTA) Regional Interactive Platform for Philippine Exporters (RIPPLES) Successful Trade Missions From January to July 2013, 33 sessions/activities on Food, Gifts/Décor/Houseware, and Information Technology-Business Process Management (IT-BPM) were conducted. Through the Philippine Trade Trading Center (PTTC), private sector experts in food technology and sanitation, creative design, IT certification, web design and merchandising, have been tapped for sessions, interventions and clinics The overseas missions in the Middle East in March 2013 have generated about US$45.4Mn in sales, which were largely on fresh and manufactured food exports. The Guangzhou Shenghao Import-Export Company (with US$3.0Bn global business as of 2012) recently visited the Philippines, looking for suppliers of metal ores and scraps, notably copper, nickel and iron. It has expressed interest to purchase or enter into venture agreements with five (5) major Philippine mineral production companies (e.g., Atlas Mining Development Corporation, First Stronghouse Mining Corporation, Apex Mining Company, TVI Resource Development, and, Ore Asia Mining and Development Corporation). Japan’s importation of foodstuff from the Philippines is expected to increase with the participation of 22 PH companies in the 38th International Food and Beverage Exhibition (FOODEX) on 5-8 March 2013 in Tokyo. Exportation of consumer non-durable products to Japan is also expected to pick up as a result of continuing negotiations derived from the 6-8 February 2013 participation of the Philippines at the Tokyo International Gift Show. Ten Philippine company participants projected actual on-site purchases amounting to US$145,000. Buyers from Japan also attended the March 2013 Manila FAME. In July 2013, 182 members of the Korea Importers Association – the only private organization exclusively dedicated to facilitating imports into Korea – went to the Philippines; and out of them, 103 Korean businessmen representing 81 companies met with 189 Filipino businessmen for business matching sessions on industrial products, food, and services. More Aggressive Export Promotion
  66. 66. 65 To help ensure sustainable economic growth, the government partnered with industry and academe to formulate and implement Industry roadmaps. Revive the Industry Development Council (IDC) Implement the Manufacturing Revival Program for 2014-2016 To address the horizontal issues of the different industries, the DTI has secured the commitment and cooperation of the lead agencies (i.e., DPWH for infrastructure; DOE for power and energy; DOST for research and development; DepEd, CHED, DOLE and TESDA for human resource development; DILG and NCC for local government regulations; and DTI as lead for international marketing and promotions and the amendment of cabotage-related laws & regulations) Industry Development Program Investment Priorities Plan (IPP) 2013 IPP – Emphasis put on job generating sectors of the economy – Priority areas: Agriculture/Agribusiness and Fishery, Creative Industries/Knowledge-based services, Shipbuilding, Mass Housing, Iron and Steel, Energy, Infrastructure, Research and Development, Green Projects, Motor Vehicles, Strategic Projects, Hospital, Medical Services, Disaster Prevention, Mitigation and Recovery Projects 2014 IPP – Strategies and action plans identified in industry roadmaps will form part of the agency’s policy thrusts, plans, and programs. – Specific priority areas composed of investment gaps identified in the roadmaps. Policy Thrusts for 2013 and 2014
  67. 67. 66 The BNRS and PBR successfully migrated to the cloud environment on 17 January and 4 February 2013, respectively, to address the numerous problems arising from hardware issues, thus delivering better service. Reduced average registration processing time of DTI, BIR (TIN-validation),SSS, PhilHealth, and Pag-IBIG to 45 minutes from 4 to 5 days. 12,090 registration for PBR for the period January-April 2013 On enhanced BNRS, average processing time for business name transaction was further reduced to 10 from 15 minutes. Business name registration used to take 4-8 hours. 177,488 registration for BNRS for H1 2013 Philippine Business Registry (PBR) and Business Name Registration System (BNRS) Business Permits and Licensing Systems (BPLS) National Economic Research and Business Assistance Center (NERBAC) A joint project of DTI and DILG to simplify permits and licensing systems in all cities and municipalities, reducing the following: – Steps to 5 or less – Processing time to 10 days (new applications) and 5 days (renewals) – Number of signatories to 5 or less As of 31 March 2013, 926 LGUs have undergone process reengineering. (Source: LGA, DILG) As a one-stop business center that provides assistance to start-up enterprises in: – business registration and licensing; – knowledge management; and – investment promotion and facilitation. Established 15 regional centers and 78 provincial centers nationwide. Enabling Business Environment for Global Competitiveness
  68. 68. 67 Accreditation of Conformity Assessment Bodies. Accreditation is the independent evaluation of conformity assessment bodies against recognized standards. In H1 2013, the Philippine Accreditation Office (PAO) accredited the following: – 6 Certification Bodies accredited to ISO 17021 – 1 Certification Body accredited to ISO Guide 65 – 208 laboratories (182 testing; 26 calibration) accredited to ISO/IEC 17025 – 5 Medical Laboratories accredited to ISO 15189 – 2 Inspection Bodies accredited to ISO 17020 Conformance to International Standards Enabling Business Environment for Global Competitiveness
  69. 69. 68 Big Push for MSMEs Provides access to market and finance, programs for productivity and efficiency, creates conducive business enabling environment, and builds alliance with relevant agencies and institutions in developing competitive and innovative MSMEs. Implementation of MSME projects: – National Industry Cluster Capacity Enhancement Project (NICCEP) – Shared Service Facilities (SSF) Project – SME Roving Academy – Other SME projects (e.g., Rural Micro Enterprise Promotion Programme (RuMEPP), Access of Small Entrepreneurs to Sound Lending Opportunities (ASENSO), Tindahang Pinoy). MSME Sector Targets and Accomplishments for 2013 Source: Department of Trade and Industry-Regional Operations and Development Group Achieving Inclusive Growth through MSME Development Targets Accomplished (Jan-Jun) % a. MSMEs assisted 67,547 35,330 52.3 b. Jobs generated 259,189 141,272 54.5 c. Domestic sales Php12,087.41Mn Php5,791.73Mn 47.9
  70. 70. 69 NICCEP aims to enhance the capacity of selected industry clusters throughout the country to plan, implement, facilitate service delivery, evaluate projects, and improve industry competitiveness and business environment. Performance of Pilot Industry Clusters 2012 - H1 2013 Abaca Bamboo Wood Banana Cacao Mango Coconut/coco coir Coffee Dairy Fine jewelry Rubber Gifts, decors, housewares Calamansi ICT Meat (fresh and processed) Poultry Metals and metal works Mining Milkfish Muscovado Organic fertilizer Pangasius Pineapple Processed food Renewable energy Palm oil Seaweed Veggie noodles Wearables and homestyles Achieving Inclusive Growth through MSME Development Source: Department of Trade and Industry-Regional Operations and Development Group TOTAL (2012 – H1 2013) Investments Php9,375.38Mn Domestic Sales Php18,193.05Mn Exports Sales US$7,681.06Mn Jobs created 152,796 MSMEs Created 2,283 MSMEs Assisted 7,658 Trainings Conducted 561 Beneficiaries Trained 17,021 Nationwide Industry Cluster Capacity Enhancement Program (NICCE) Priority Industry Clusters
  71. 71. 70 The Shared Service Facilities, a Public-Private Partnership project to assist community-based MSMEs nationwide through the provision of lacking machineries and equipment for common use to increase their productivity and efficiency. The type of equipment include packaging machines, retort, kiln driers, dye vats, slicers, thickness planner and handlooms, among others. Php700Mn worth of technical support has been allotted for 2013. As of 31 July 2013, 121 SSFs with total cost of Php43Mn have been launched, which benefitted around 16,000 MSMEs and created approximately 5,000 additional employment. Source: Department of Trade and Industry-Regional Operations and Development Group, Department of Trade and Industry-Bureau of Micro, Small and Medium Enterprise Development The SME Roving Academy (formerly known as SME Caravans) is a nationwide continuous learning program for the development of MSMEs to help them become more competitive in the domestic and international markets. Already launched in 12 regions, entrepreneurs are equipped with the right entrepreneurial attitude and mind-set, enhanced managerial capabilities, appropriate knowledge on marketing preference, technology and lifestyles to help them establish and grow their businesses. Php17.3Mn budget allocated for 2013, to assist 10,000 MSMEs. As of 31 July 2013, the SME Roving Academy has capacitated a total of 957 SMEs and 704 would-be entrepreneurs. Achieving Inclusive Growth through MSME Development Source: Department of Trade and Industry-Regional Operations and Development Group Shared Service Facilities (SSFs) SME Roving Academy
  72. 72. 71 Fair Trade Law Compliance (January to April 2013) *National Committee on Intellectual Property Rights Source: Department of Trade and Industry’s First Semester 2013 Accomplishment Report The DTI unceasingly monitors and enforces the compliance of retailers and sellers to Fair Trade Laws (FTLs) to protect the interest of consumers and to generate business. During the first four months of 2013, a total of 45,553 establishments were monitored nationwide, 59 firms of which, or 0.1%, were found not complying with FTLs and 46 firms were penalized and imposed a total of P821,250 in fines. Out of the 59 cases filed, 46 or 78% were resolved. For the period January to May 2013, combined operations of the NCIPR* member agencies resulted in seizures of 3,495,264 units of counterfeit and pirated goods with an estimated value of Php1.57Bn. Empowering Consumers Total Number of DTI-Monitored Firms 45,553 Resolution Rate 78% Amount of fines collected Php821,250
  73. 73. 72 Consumer Complaints Resolution (January to March 2013) Source: Department of Trade and Industry’s First Semester 2013 Accomplishment Report For Q1 2013, a total of 21,054 consumer complaints were reported at Consumer Welfare Desks (CWDs). Of this number, 93% or 19,644 were reported at business establishments (BEs) while 1,410 or 7% were at DTI. Resolved about 98% of total complaints reported. Remaining 2% was endorsed to other concerned government agencies, still on the process of resolution within DTI, or was dismissed. Empowering Consumers Performance DTI Business Establishment Number % to Total Number % to Total Resolved 1,167 82.8 19,422 98.9 Pending 209 14.8 208 1.1 Referred / Endorsed 27 1.9 14 0.0 Dismissed 7 0.5 0 0.0 TOTAL 1,410 100.0 19,644 100.0
  74. 74. 73 Agriculture and Fisheries Secretary Proceso J. Alcala Department of Agriculture
  75. 75. 74 Midterm Milestones Agriculture and Fisheries Sector Achieved significant reduction in rice imports Average annual decline in rice importation since 2010. ↓↓↓↓ 53.9% Estimated forex savings due to decrease in imports US$1.4 Bn 6.9 % Posted record harvests in rice Average annual growth since 2010 18.0MMT volume of production in 2012 Average, 2001-2010 2010/2011 2011/2012 Average, 2011-2012 Production Growth 2.5% 5.8% 8.1% 6.9% palay productiongrew by 8.1% in 2012, the highest recordsince 2000 in achieving 100% self Improved rice self-sufficiency levels 94.4% 2012 rice self - sufficiency On-track - sufficiency by the end of 2013. Tapped international niche market for rice 1 The Philippines exported premium and organic black rice varieties (first time in 40 years to export in commercial volume) to Singapore 45 MT ; Dubai 35 MT ; Kuwait and HK 15 MT ; and Germany , HK, Macau, Canada, Netherlands 11.55 MT We aim to export to Russia, Italy, Middle East , USA about 97 MT until year -end 1 more info on http://www.da.gov.ph/index.php/2012 -03-27-12-04-15/2012 -04-17-09- 30-59/4169 -da-exceeds -100-mt-rice-export -target
  76. 76. 75 Posted record harvests in corn Improved productivity in major commodities Commodity Baseline, 2010 Ave., 2011 - 2012 Rice 3.62 3.76 White Corn 1.62 1.67 Yellow Corn 3.63 3.96 Coconut 0.80 0.84 Pineapple 37.37 39.75 Banana 20.19 20.36 Sugarcane 49.85 62.94 Yield (mt/ha) of various commodities, 2010-2012 Source: Bureau of Agricultural Statistics, National Economic and Development Authority (2013) Regenerated fishery resources Before closed season: <1 MT 5 MT Average fish catch of a commercial purse seiner: After closed season: Based on results of the 3-month closed season in EastSulu Sea, Basilan Strait, and Sibuguey Bay. Maintained disease-free status FMD-free without vaccination Avian flu-free For every 1 kg of sardines left to spawn, 27 kilos would be gained after the closed season . certified by the Office International des Epizooties- World Animal Health Organization in May 2011 7.8 %Average annual growth since 2010 7.4MMT volume of production in 2012 Average, 2001-2010 2010/2011 2011/2012 Average, 2011-2012 Production Growth 3.9% 9.3% 6.2% 7.8% Corn production posted a record growth of 11.4%in the Midterm Milestones Agriculture and Fisheries Sector 2013 Q1
  77. 77. 76 Midterm Milestones Agriculture and Fisheries Sector Maintained stable food prices Expansion and opening of new export markets Coco water Coco Sugar Muscovado Sugar Organic Coffee Fruit Juices (Calamansi ) Processed Peanut Fresh bananas Cavendish chips Bagoong Livestock and Poultry Further developed rural infrastructure 839.4 km better quality, concreted FMRs constructed/rehabilitated Farm-to-Market Roads 101,698 ha new areas generated Irrigation Systems 89,275 ha areas restored from 2011 to June 2013: Maintained stable food prices 5.4 2.4 1.8 2011 2012 2013 (as of Aug) Inflation Rates, Food and Non - Alcoholic Beverages (2006=100) Below the annual PDP Target of 3% to 5% Source: National Statistics Office (July 2013)
  78. 78. 77 Agriculture and Fisheries Performance First Semester of 2013 1 up from the 0.8% growth the same period in 2012 2 due to improved production and prices which led to increase in gross receipts of major fish species Source: National Statistical Coordination Board Highlights The A&F sector accounts for 10 .2% of the Philippine economy (H1 2013, NSCB) It employs 30 .4 % of the total labor force, or about 11.6Mn workers (January 2013 round, BAS ) Its total agricultural exports revenue amounted to around $1.6B, higher by 41 .5% the same period in 2010 (Q1 2013 , BAS ) Top Industry Performers in terms of 2013 H1 GVA growth are as follows : Mango 6.6% Fisheries 4.6% Poultry 4.2% Pineapple 3.6% Livestock 2.1% Fisheries subsector rebounded to 4.6%, up from -3.1%2 the same period in 2012 (H1 2013, NSCB)0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 H1 2012 H1 2013 Value (million Php) ↓↓↓↓ 0.5% Crops Livestock Poultry Fisheries 2.1% 4.2% 4.6% The agriculture and fisheries sector GVA grew by 1.3% for H1 2013 1 Gross Value Added in Agriculture and Fisheries H1 2013, at constant 2000 prices
  79. 79. 78 Agriculture and Fisheries Performance First Semester of 2013 The sector posted modest farm output growth of 1.4% for H1 2013 Commodities with Notable Increases in Output: Fisheries Subsector Skipjack 30.28% Roundscad 24.46% Yellowfin Tuna 13.98% Crops Subsector Tobacco 11.18% Onion 8.53% Mango 6.70% Poultry Subsector Chicken 5.05% Duck Eggs 4.60% Livestock Subsector Hog 2.36% Dairy 2.35% Source: Bureau of Agricultural Statistics 2013
  80. 80. 79 Generated some 79,800 hectares of irrigated areas: about 9,100 from construction of new systems, some 62,800 from rehabilitation and approximately 7,900 from restoration of existing irrigation systems Installed/constructed around 2,300 small-scale irrigation projects Serviced some 52,600 individual beneficiaries Irrigation Network Services Farm-to-Market Roads Development Agricultural and Fishery Equipment and Facilities Support Services Constructed 28kms of concrete farm-to-market roads Rehabilitated more than 150kms of existing farm-to-market roads Distributed around 88,600 units of postharvest equipment and machineries such as dryers, threshers, milling equipment, and postharvest equipment and machineries for fisheries Constructed 396 postharvest facilities for drying, storage, and processing Constructed around 110 linear meters of foot bridges/ foot paths Maintained 65 mariculture parks and constructed 3 new municipal fishports Serviced some 1,300 individual and 170 group beneficiaries First Semester of 2013 Department of Agriculture Accomplishments Established some 2,700 production facilities including nurseries, greenhouses, hatcheries, bio-mixing plants, and sea cages Distributed around 70,900 production equipment and machineries including tractors, tillers, cultivators, transplanters, sprayers, mist blowers, harvesters, reapers, and fishery equipment Upgraded 30 and maintained about 790 production-related facilities Serviced some 155,400 individual and about 1,400 group beneficiaries Production Support Services
  81. 81. 80 Extension Support, Education and Training Services Conducted about 37,300 training and training-related events for some 63,200 participants Provided scholarship grants to a total of 485 scholars, both for degree and non-degree courses Disseminated more than 660,000 copies of information, education and communication (IEC) materials including print and audio-visuals. First Semester of 2013 Department of Agriculture Accomplishments Research and Development Funded/conducted about 1,800 research and development activities Funded/established, upgraded, and maintained a total of 145 research facilities Credit Facilitation Services Assisted some 10,800 individuals to grant or access loans and insurance Made available a total Php306Mn for credit, loans, insurance for farmers and fisherfolk Marketing Support Services Facilitated establishment of 5 trading post/ centers Established 57 food terminals Facilitated 33 Livestock Auction Markets (LAMs) Regulatory Services Maintained disease-free status on Foot and Mouth Disease (without vaccination) and Avian Influenza, and strengthen disease prevention activities across all commodities Issued about 1.3Mn regulatory documents including certificates, clearances, permits, licenses, and registrations Implemented 361 Coastal Resource Management projects (i.e. fish sanctuaries, artificial reefs, propagules planting) Conducted about 1,600 stakeholders consultations Conducted 43 evaluation studies Policy and Planning Services
  82. 82. 81 Sector Targets 2013 and Beyond Attain and Sustain Self-Sufficiency in Rice 100% by the end of 2013 Growth in Agriculture and Fisheries Gross Value Added (GVA) 2013 2014 2015 2016 AF GVA increased (%) 3.5-4.5 3.2-4.2 3.3-4.3 3.5-4.5 Crops 4.5-5.5 4.0-5.0 3.8-4.8 4.0-5.0 Livestock 1.2-2.2 1.2-2.5 1.5-3.0 1.6-3.5 Poultry 4.2-5.2 4.2-5.2 4.2-5.2 4.2-5.2 Fisheries 1.5-3.0 1.5-2.5 2.3-3.0 3.8-2.5 Maintain Stable Food Prices Increase Agriculture Exports 3.5% to 4.5% (or lower) inflation rate of basic food commodities 10% or higher Increase the total value of agriculture exports Source: Philippine Development Plan – Results Matrix
  83. 83. 82 Way Forward: Sector Priorities and Directions 2013 and Beyond Attain and Sustain Food Security Establish Enabling Environment for Enhanced Agriculture and Fisheries Competitiveness Increase Agriculture and Fisheries Climate Resiliency Develop Focus Agro-Industries for Inclusive Growth 1 2 3 4
  84. 84. 83
  85. 85. 84 Attain and Sustain Food Security Sector Priorities and Directions The Philippine Food Staples Sufficiency Program (FSSP) is geared towards the attainment of 100% rice self-sufficiency by end of 2013. ● Raise farm productivity and competitiveness Accelerate investments in irrigation, post harvest facilities and mechanization Encourage use of suitable high-quality seeds, fertilizers, and other ICM Sustain research and development (R&D) in new varieties and crop management Enhance delivery and effectiveness of extension services Boost yield and overall productivity growth in rainfed lowland rice areas Harness the potential of high-elevation and upland rice ecosystems ● Enhance economic incentives and enabling mechanisms Implement NFA reforms (i.e. price support and procurement) Strengthen credit provision to small farmers Expand coverage of crop insurance. ● Manage food staples consumption Encourage consumption of unpolished rice (brown rice or pinawa) Promote production and consumption of other food staples (e.g. white corn, kamote, saba) Reduce food wastage Key Strategies: Increase volume of production of palay, white corn and cassava No importation beyond international commitments Exportation of premium rice to balance the Minimum Access Volume commitment Reduce the cost of production to levels competitive with the border Commitments:
  86. 86. 85 Establish Enabling Environment for Enhanced Agriculture and Fisheries Competitiveness Sector Priorities and Directions Increase efficiency in investments in agriculture and fisheries − Fully utilize allocated funds for natural infrastructure (e.g., mangroves, watershed, soil and water, coral cover) and hard infrastructure (e.g. irrigation, FMRs, postharvest, trading centers) Raise productivity and production of majorcommodities − Increase yield of major crops (e.g. rice, corn, high value crops, coconut) − Increase in volume of production of livestock and fisheries Strengthen regulatory capacity − Ensure compliance with international standards (or equivalence) − Maintain FMD-free and Avian Flu-free status and protect the borders from the entry of pests and diseases Intensify market development efforts − Develop new export commodities and new export markets; Establish market-related infrastructure Commitments:
  87. 87. 86 Increase Agriculture and Fisheries Climate Resiliency Sector Priorities and Directions In 2012, the Philippines adopted the APEC-initiated “Adaptation and Mitigation Initiative in Agriculture” (AMIA) as the DA’s system-wide program on climate change. Invest in climate-resilient irrigation infrastructures with improved design standards and construction protocols Construct farm-to- market roads that are permanently surfaced and with proper drainage Invest in the development and improvement of agriculture and fisheries technologies adaptive to climate change and extension Facilitate credit access, develop risk transfer mechanisms (e.g. weather-based insurance), and expand insurance coverage to other commodities (e.g. fisheries, livestock) Strengthen and modernize data collection Intensify of climate change-related information, education and communication (IEC) efforts Strengthen soil and water conservation and management program Commitments:
  88. 88. 87 Focus Agro-Industries for Inclusive Growth Sector Priorities and Directions Engage a majority of the three million coconut farmers and households in activities and enterprises Develop emerging coconut-based products (e.g. coco water, coco sugar, virgin coconut oil, coco coir, coco nets, cooking oil, coconut milk and coco diesel blend) with higher value than the traditional copra-based enterprises Ensure farmers participation in enterprises from supplying raw materials to employment in processing plants Link social protection to small coconut farmers’ participation in industry development Establish coconut agro-industrial hubs
  89. 89. 88 Focus Agro-Industries for Inclusive Growth Sector Priorities and Directions Regenerate, protect, and promote responsible extraction of resources Establish payaos in the eastern seaboard and west of the Philippine Sea to encourage the commercial fishers to leave the municipal waters to the municipal fishers; set up small payaos within municipal waters (15 km. from the shoreline) so small fishers can easily return home during inclement weather Provide appropriate infrastructure and facilities to increase value of small farmers’ fish catch Develop enterprises (e.g. seaweed growing and processing, salt making, fish processing) that would provide income opportunities to fishing households Implement a mangrove restoration and multi-specie hatchery program that will allow fisher families to raise blue crabs, soft shell crabs and others in designated rehabilitated mangrove areas Secure home lots and land-based livelihoods for fishing households Develop fishery-based agro-industries
  90. 90. 89 Tourism Secretary Ramon R. Jimenez Department of Tourism
  91. 91. 90 Mandate of DOT As provided by the Tourism Act of 2009 (RA 9593) Planning and regulatory agency in the development and promotion of the tourism industry, both domestic and international, in coordination with its attached agencies and other government instrumentalities Instill in Filipinos the tourism industry’s fundamental importance in the generation of employment, investment and foreign exchange
  92. 92. 91 RANK COUNTRY JAN - JUNE 2012 JAN - JUNE 2013 GROWTH RATE 1 KOREA 474,685 585,282 23.30% 2 USA 354,259 364,506 2.89% 3 JAPAN 195,504 209,812 7.32% 4 CHINA 150,749 199,157 32.11% 5 AUSTRALIA 92,648 103,286 11.48% 6 TAIWAN 114,269 86,076 -24.67% 7 SINGAPORE 73,015 86,290 18.18% 8 CANADA 65,503 68,430 4.47% 9 HONGKONG 57,790 65,696 13.68% 10 UNITED KINGDOM 57,181 60,234 5.34% 11 MALAYSIA 49,788 54,154 8.77% 12 GERMANY 34,189 37,025 8.30% 13 OTHERS 423,926 460,645 8.66% GRAND TOTAL INCLUDING OTHERS 2,143,506 2,380,593 11.06% Source: Arrival/Departure Cards and Shipping Manifests International Visitor Arrivals
  93. 93. 92 International Visitor Arrivals 2013 per Month 411,064 361,925 375,083 349,779 321,930 323,725 436,079 418,108 417,392 377,879 362,062 369,073 6.1% 15.5% 11.3% 8.0% 12.5% 14.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 Jan Feb Mar Apr May Jun 2012 2013 Percentage Change, RHS
  94. 94. 93 2,428.7 2,236.0 2,490.2 2,994.0 3,817.8 4,864.0 6,391.4 8,297.7 10,774.6 0.0 2,000.0 4,000.0 6,000.0 8,000.0 10,000.0 12,000.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 CAGR = 29.6% CAGR = 5.2% Visitor Receipts (in US$ Million) *CAGR – cumulative average growth rate PROJECTEDACTUAL
  95. 95. 94 1. Develop and market competitive tourist products and destinations 2. Improve market access, connectivity and destination infrastructure 3. Improve institutional governance and human resources Strategic Directions National Tourism Development Plan (NTDP) 2011 - 2016
  96. 96. 95 Nature Tourism Cultural Tourism Sun and Beach Tourism Cruise and Nautical Tourism Leisure and Entertainment Tourism MICE & Events Tourism Health,Wellness, and Retirement Tourism Diving & Marine Sports Tourism Education Tourism 1. Develop and market competitive tourist products and destinations (NTDP 2011 – 2016 Strategic Directions) Product Portfolio
  97. 97. 96 1. Develop and market competitive tourist products and destinations (NTDP 2011 – 2016 Strategic Directions) PRODUCT – MARKET STRATEGIES PRESENT NEW Market Penetration Aggressive promotion strategies targeted to Japan, South Korea, USA, China to increase the number of overnight visitors. Product Development Quality improvement strategies that seek to increase daily tourist expenditure through higher quality tourist products and services. Market Development Aggressive promotion strategies targeted to Australia, Singapore, Malaysia, Canada markets to increase the number of overnight visitors. Diversification Product development and diversification strategies to increase the average tourist length of stay. MARKETS PRESENTNEW Main Strategy Niche Strategy Secondary Strategy
  98. 98. 97 DOT-DPWH Road Infrastructure Program 2. Improve market access, connectivity and destination infrastructure (NTDP 2011 – 2016 Strategic Directions) In Php Million Developed the Tourism Road Infrastructure Project (TRIP) Prioritization Criteria Endorsed for approval by the Tourism Coordinating Council 167 road projects with total of 598kms worth Php12.0Bn for FY 2013 Budget Organized capacity building for CTWG and RTWGs
  99. 99. 98 MARKETS SEAT ENTITLEMENTS PH FOREIGN Korea 1,482,000 1,482,000 Japan 1,856,400 1,856,400 China 702,000 702,000 Taiwan 522,600 522,600 Australia 312,000 208,000 Singapore 2,280,044 2,280,044 Hong Kong 1,367,600 1,367,600 Canada 109,200 109,200 Malaysia 354,640 354,640 United Kingdom 218,400 218,400 Germany 109,200 109,200 India 109,200 109,200 Indonesia 156,000 156,000 Thailand 355,680 355,680 Vietnam 312,000 312,000 TOTAL 10,246,964 10,042,964 ENTITLEMENT UTILIZATION PH % FOREIGN % 1,177,800 79.47% 1,339,624 90.39% 533,624 28.75% 247,520 13.33% 617,760 88.00% 182,936 26.06% 239,358 45.80% 178,204 34.10% 250,068 80.15% 95,368 45.85% 882,544 38.71% 721,136 31.63% 958,880 70.11% 897,468 65.62% 109,200 100.00% 0 0.00% 355,680 100.29% 346,840 97.80% 0 0.00% 0 0.00% 0 0.00% 0 0.00% 99,112 90.76% 0 0.00% 147,368 94.47% 0 0.00% 313,976 88.27% 158,600 44.59% 122,304 39.20% 0 0.00% 5,807,674 56.68% 4,167,696 41.50% Air Seat Entitlements and Utilization 2012
  100. 100. 99 Volume of Flights, Passengers and Visitors per International Airport January – June (2012 – 2013) 2012 2013 International Airports Total Number of Flights Total Number of Passengers % Share of Visitors from Total Passengers Total Number of Flights Total Number of Passengers % Share of Visitors from Total Passengers Manila 18,945 3,498,656 45.60% 20,839 3,683,137 46.60% Kalibo 864 127,162 99.50% 1,083 158,740 99.80% Cebu 2,392 376,577 79.10% 2,789 429,126 81.30% Clark 1,913 208,690 46.70% 2,590 289,749 44.10% Davao 76 12,014 35.10% 54 7,879 46.20% Iloilo 4 377 100.00% 131 14,681 12.70% International Airports Flights % Difference 2012 - 2013 Passengers % Difference 2012 - 2013 Manila 10.00% 5.30% Kalibo 25.30% 24.80% Cebu 16.60% 14.00% Clark 35.40% 38.80% Davao -28.90% -34.40% Iloilo 3175.00% 3794.20%
  101. 101. 100 Room Capacity 2012 Destinations Available Room Number of Establishments Northern PH 71,804 2,248 NCR 31,790 320 Central Luzon 15,024 489 Other Regions 24,990 1,439 Central PH 61,978 3,220 Western Visayas 15,200 635 Central Visayas 27,447 1,306 Other Regions 19,331 1,279 Southern PH 28,922 1,405 Northern Mindanao 8,113 380 Southern Mindanao 9,613 404 Other Regions 11,196 621 Total PH 162,704 6,873 Fairmont Hotel and Raffles Suites Quest Hotels & Conference Ctr Cebu Calyx Center – Cebu Bellevue Resort – Bohol Tunes Hotel – Cebu Luxent Hotel – Quezon City Dohera Hotel – Cebu Microtel Accropolis – Quezon City New Major Accommodation Facilities in 2012
  102. 102. 101 Room Projection from 2013 to 2016 Destination Clusters Island Grouping Northern PH Central PH Southern PH Total PH Critical Cluster Destinations Room Demand Available Room In the Pipeline Room Gap Metro Manila & CALABARZON 54,818 37,311 7,330 10,177 Central Visayas 41,402 27,447 2,124 11,831 Bicol 15,804 8,549 130 7,125 Cordillera 9,851 6,855 106 2,890 Manila will still need the most rooms between now and 2016 Key demand cities outside of Manila are: Cebu, Panglao, Bicol, Cordillera Current accommodation development in the pipeline covers only 40% of room requirement Room Supply (Available + Pipeline) Available in 2012 In the Pipeline 71,804 8,206 61,978 5,129 28,922 1,686 162,704 15,021 Room Gap In Critical Destination Clusters 16,025 20,757 570 37,352
  103. 103. 102 3. Improve institutional governance and human resources (NTDP 2011 – 2016 Strategic Directions) Regulatory Impact Assessment (RIA) – Assist pilot LGUs to design and implement a RIA of their local ordinances affecting tourism Hotel and Resort Quality Assurance and Accreditation System (HRQAAS) – Strengthen institutional arrangement for implementation of new standards, rating system and mandatory accreditation Tourism Industry Skills Development Program (TISDP) – Develop a human resources plan/ strategy for tourism Programs
  104. 104. 103 3. Improve institutional governance and human resources (NTDP 2011 – 2016 Strategic Directions) Improve the Philippines ranking in the World Economic Forum (WEF) Travel and Tourism Competitive Index Reduce business cost and improve compliance Implement the new standards and accreditation system Train 5,000 tourism workers Certify 500 tourism professionals under the ASEAN MRA Programs
  105. 105. 104 Highlights of Major Accomplishments (January - June 2013) As of June 2013, 88 local development plans were evaluated, monitored or updated. Signed a “Statement of Intent on SMART Visa” during the Travel and Tourism High Level Meeting in the 22nd WEF on East Asia. Spearheaded the development of 89 tourism products in the various regional destinations for January – June 2013 Signed an Agreement with the Department of Environment and Natural Resources (DENR) under the Biodiversity Partnerships Project (BPP), a project funded by the Global Environment Fund. Develop and market competitive tourist products and destinations
  106. 106. 105 Highlights of Major Accomplishments (January - June 2013) Improve market access, connectivity and destination infrastructure Signed convergence program with the Department of Public Works and Highways with a total budget of Php12Bn for 2013 and Php14.4Bn for 2014. – 167 Road projects, totalling to 598km of roads leading to major and secondary destinations. Facilitated the lifting of the EU ban on PAL flying to European destinations.
  107. 107. 106 Highlights of Major Accomplishments (January - June 2013) Improve institutional governance and human resources As of June 2013, 110 capacity building programs for local government units in the areas of planning, product development, statistics, policy and governance, as well as for industry workers to enhance skills and competencies has already been done Accredited 1,357 various tourism establishments as of June 2013 Signed a Memorandum of Understanding with DSWD and the USAID for the Implementation of the “One- Step Project” Adopted a New Rating System based on international standards for the Philippine hotel industry. Signed a Memorandum of Agreement (MOA) with media conglomerate ABS-CBN to launch Bantay Kalikasan’s Green Initiative, a joint program involving the government, media and academe.
  108. 108. 107 INDICATORS 2013 2014 2015 2016 International Tourists Visitor Arrivals (Mn) 5.5 6.8 8.2 10.0 Length of Stay (nights) 8.0 8.0 8.0 8.0 Average Daily Expenditure (Php) 4,914.0 5,431.0 5, 939.0 6,470.0 Visitor Receipts (Php Bn) 205.4 269.9 350.4 455.0 Domestic Tourists Domestic Travellers (Mn) 44.1 47.7 51.7 56.1 Domestic Trips (Mn) 176.2 191.0 206.9 224.2 Length of Stay (nights) 4.7 4.7 4.7 4.7 Average Daily Expenditure (Php) 2,580.0 2,593.0 2,739 2,922 Domestic Receipts (Php Bn) 1,298.6 1,409.2 1,607.1 1,852.1 Targets, 2013 - 2016
  109. 109. 108 INDICATORS 2013 2014 2015 2016 Gross Domestic Product Total Visitor Receipts (Php Bn) 1,504.0 1,679.1 1,957.5 2,307.1 Tourism GVA (Php Bn) 748.3 835.4 974.0 1,147.9 Share to GDP (%) 6.7 7.0 7.8 8.7 Employment Tourism Employment (Mn) 4.9 5.4 6.3 7.4 Share to National Employment (%) 13.0 14.2 16.2 18.8 Economic Impact Projection 2013 - 2016
  110. 110. 109
  111. 111. 110 Energy Secretary Carlos Jericho L. Petilla Department of Energy
  112. 112. 111 Good Governance thru stakeholder participation, multi-sectoral partnership and use of information and communications technology (ICT) Ensure Energy Security Achieve Optimal Energy Pricing Develop a Sustainable Energy System “Energy Access for More” A key priority of government to mainstream access of the greater majority to reliable energy services and fuel, most importantly, local productivity and countryside development Promote Transparency Initiatives, Implementation and Information Energy Reform Agenda (ERA)
  113. 113. 112 Power Sector Reform Issued implementing rules and regulations for National Electrification Administration (NEA) Reform Act of 2013 Launched Retail Competition and Open Access on 26 June 2013 (RCOA) Operationalized policy support for the Interim Mindanao Electricity Market (IMEM) Reformed ailing electric cooperatives through implementation of strict compliance mechanism including power generation companies Continued oversight in the Operation and Governance of the Wholesale Electricity Spot Market (WESM) Rules
  114. 114. 113 Luzon Supply-Demand Outlook 2013-2020Megawatts Notes Demand curve as plotted includes total of peak demand and required Reserve Margin (RM) i.e. 4% regulating reserve and contingency and dispatchable reserve requirement 4.2% peak demand growth rate resulted from observed 0.6 elasticity ratio of demand for electric power with national economic growth applied to 7% GDP growth rate (GR) target for 2013-2015. 4.8% peak demand growth rate resulted from observed 0.6 elasticity ratio of demand for electric power with national economic growth applied to 8% GDP growth rate (GR) target for 2016-2020. Assumed 6.6% average forced outage of the total dependable capacity * Committed projects are those which are in various stages of construction and have complied with all permitting / licensing requirements from all concerned agencies and local government units; also, they are those which have achieved financial closure. On Available Capacity: Apr-May 2015: Projected Deficit of 184MW Mar-Jul 2016: Projected Deficit of 240MW to 635MW On Available Capacity + Committed*: Apr-Jun 2017: Projected Deficit of 200 to 450MW Mar-Dec 2018: Projected Deficit of 270 to 940MW
  115. 115. 114 Visayas Supply-Demand Outlook 2013-2020Megawatts Notes Demand curve as plotted includes total of peak demand and required Reserve Margin (RM) i.e. 4% regulating reserve and contingency and dispatchable reserve requirement 7 % peak demand growth rate resulted from observed 1 elasticity ratio of demand for electric power with national economic growth applied to 7% GDP growth rate (GR) target for 2013-2015. 8 % peak demand growth rate resulted from observed 1 elasticity ratio of demand for electric power with national economic growth applied to 8% GDP growth rate (GR) target for 2016-2020. Assumed 7% average forced outage of the total dependable capacity On Available Capacity: Nov-Dec 2014: Projected Deficit of 30 to 90MW Apr-Dec 2015: Projected Deficit of 80MW to max 220MW On Available Capacity + Committed: Dec 2015: Projected Deficit of 60MW Apr-Jun 2016: Projected Deficit of 70 to 100MW Dec 2017-Dec 2018: Projected Deficit of 120 to 305MW
  116. 116. 115 Mindanao Supply-Demand Outlook 2013-2020Megawatts Notes Demand curve as plotted includes total of peak demand and required Reserve Margin (RM) i.e. 4% regulating reserve and contingency and dispatchable reserve requirement 5.6% peak demand growth rate resulted from observed 0.8 elasticity ratio of demand for electric power with national economic growth applied to 7%GDP growth rate (GR) target for 2013-2015. 12.8 % peak demand growth rate resulted from observed 1.6 elasticity ratio of demand for electric power with national economic growth applied to 8%GDP growth rate (GR) target for 2016 8% peak demand growth rate resulted from observed 1 elasticity ratio of demand for electric power with national economic growth applied to 8% GDP growth rate (GR) target for 2017-2020 Assumed 3.41% average forced outage of the total dependable capacity On Available Capacity: 2013: Projected Deficit of 50 to 110MW 2014: Projected Deficit of 50 to 190MW 2015: Projected Deficit of 120 to 280MW
  117. 117. 116 Mindanao Supply-Demand Outlook 2013-2020Megawatts Notes Demand curve as plotted includes total of peak demand and required Reserve Margin (RM) i.e. 4% regulating reserve and contingency and dispatchable reserve requirement 5.6 % peak demand growth rate resulted from observed 0.8 elasticity ratio of demand for electric power with national economic growth applied to 7%GDP growth rate (GR) target for 2013-2015. 12.8% peak demand growth rate resulted from observed 1.6 elasticity ratio of demand for electric power with national economic growth applied to 8% GDP growth rate (GR) target for 2016 8% peak demand growth rate resulted from observed 1 elasticity ratio of demand for electric power with national economic growth applied to 8% GDP growth rate (GR) target for 2017-2020 Assumed 3.41% average forced outage of the total dependable capacity On Available Capacity + Committed: Nov-Dec 2017: Projected Deficit of 20 to 50MW 2018: Projected Deficit of 50 to 200MW
  118. 118. 117 Interventions on the Mindanao Supply Situation Recommendations Status Operate Illigan Diesel Power Plant (IDPP) Currently running at 60MW and scheduled to be in full operations by October 2013 at 98MW Interruptible Load Program (ILP) Mechanism which allows for the compensation of customers of a distribution utility (DU) for voluntarily taking itself off the grid during peak demand. With Energy Regulatory Commission (ERC) approving the new rates based on Davao Light’s petition, large customers will be encouraged to join. Interim Mindanao Electricity Market (IMEM) Issuance of Department Circular (DC) 2013-01-001 dated 9 January 2013 which directed PEMC to develop and implement an IMEM Target commercial operations by 26 September 2013 Modular Genset Scheme Fastest way of deploying the needed generating capacity in the island DOE has directed NEA to expediently implement the program Will provide supply until new capacities come online by 2015 EO 137, “The Mindanao Modular Generator Sets Program”, promulgated and its IRR already signed Creation of One-Stop Shop Appointed Investment Officers to facilitate the processing of applications, permits and licenses of energy investors. Develop Mindanao Energy Plan (MEP) Proposed conduct of consultations is by September 2013
  119. 119. 118 Interventions on the Mindanao Supply Situation Recommendations Status Privatization of Power Barge 101-104 Indicative bidding is by Q3 2013 Balo-I Flood Control Project DPWH will re-file to NEDA-ICC for the approval of the project This will maximize the output of Agus 1 and 2 Hydroelectric Plants and address flooding in Balo-I Plain Agus 6 Unit 1 & 2 Uprating Project PSALM Board has approved and confirmed the project implementation including the realignment of budget from National Power Corp.- Operations and Management Agreement – Maintenance and Other Operating Expenditures (NPC-MOA MOOE) to PSALM. Indicative bidding is by Q3 while awarding is by Q4 2013. Reservoir Management of Pulangi IV NPC is flushing bottom sluice gates to minimize water spillage during rainy season and to address sediment buildup Privatization of Agus-Pulangi Complexes Under discussion of Joint Congressional Power Committee (JCPC) Visayas-Mindanao Interconnection Project Feasibility Study was completed in March 2013. The target project completion is by 2018
  120. 120. 119 Indigenous Fossil Fuel Development Unit Production No. of Contracts Supervised/Monitored 2011 2012 H1 2013 Gas Bn Cubic Feet 140.4 137.77 67.92 26 Condensate Mn Barrels 5.1 4.75 2.32 Coal Mn Metric Tons (@10,000 BTU/lb) 6.9 7.4 2.9 71 11 Coal Operating Contracts awarded 3 Petroleum Service Contracts awarded and 1 endorsed to the Office of the President
  121. 121. 120 Enhanced Renewable Energy Development Resource For Conversion With Certificate of Confirmation of Commerciality No. of Projects Capacity (MW) No. of Projects Capacity (MW) Hydro 51 504.2 6 47.6 Wind 9 548.5 5 339.5 Solar 11 160 3 80 Biomass 10 76.7 1 1.1 Total 81 1,289.4 15 468.2 Feed-in-Tariff (FIT) System Highlights – FIT Rules approved by ERC on 12 July 2010 and took effect on 12 August 2010 – ERC approved the FIT Rates on 27 July 2012 – Issuance of Department Circular 2013-05-009 prescribing DOE Guidelines for the Selection Process of Renewable Energy (RE) Projects Under FIT System and the Award of Certificate for FIT Eligibility Note: Department Circular No. 2009-07-0011 entitled “Guidelines governing a transparent and competitive system of awarding renewable energy service/operating contracts and providing for the registration process or RE developers” is currently being revisited to facilitate the processing of RE Applications. Target date of completion of 249 pending RE applications is on November 2013 FIT Monitoring Board Summary (as of July 2013)
  122. 122. 121 Promoted Energy Efficiency and Conservation (EE&C) National EE&C Programs Actual Savings (in MMBFOE) 2010 2011 2012 Information, Education and Communication Campaign 3.45 4.56 4.16 Voluntary Agreements 3.60 3.24 3.41 Energy Standards and Labeling 14.27 15.3 18.37 Government Energy Management Program (GEMP) 0.22 0.28 0.26 Energy Management Program 3.26 3.80 3.43 Phil. Energy Efficiency Project - 0.29 0.50 Total Savings 24.80 27.48 30.13 Deferred Capacity Addition (MW) 1,104 1,222 1,341 MMBFOE – Million Barrels of Fuel Oil Equivalent
  123. 123. 122 Household Electrification Program (HEP) Year Luzon Visayas Mindanao Total 2010 648 167 1,935 2,750 2012 (1st Batch) 2,308 1,864 2,288 6,460 2012 (2nd Batch) 750 435 2,215 3,400 2013 (1st Half) 2,136 1,702 3,062 6,900 Total 5,842 4,168 9,500 19,510 HEP is an ongoing program providing electricity to households
  124. 124. 123 Good Governance Operationalized www.kuryente.org.ph providing public information on electricity rates and generation capacity Operationalized www.wattmatters.org.ph providing public information on energy consumption wattage rating and energy efficiency performance of different household electrical appliances
  125. 125. 124 2013 Onwards: Nurturing Sustainable Growth Continuing Activities – Household and Sitio Electrification – Biofuels blending (E10 and B5 Mandate) – Energy Supply Demand Outlook – Energy efficiency and conservation through Standards and Labeling Program – Renewable energy installation – E-Trike (developmental and scale-up) – Clean energy technologies (Euro 4) – Web based availability of energy information – Accelerated development of indigenous resources (Philippine Energy Contracting Round 5) Special Activities – Mindanao power supply initiatives (Modular Genset) – Improved grid reliability
  126. 126. 125 High Impact Solar Projects Scheme: DOE to bid out for the installation, operation and maintenance Commercial Cost of Electricity – must be lower than the prevailing consumer price by Php2.00/kWh Type of Private Schools* Number of Schools Capacity (MW)* College/University 587 59 High School 5,299 530 Elementary 10,170 1,017 Total 10,056 1,606 * Maximum capacity for distributed generation is 100 kWp/installation
  127. 127. 126 High Impact Hydro Projects No. of Electric Cooperatives Potential Cost (Php Bn) 78 2,066MW 310 Scheme: DOE to validate potential hydropower sites and match with supply requirement of Rural Electric Cooperatives (RECs). PNOC-Renewables Corporation (PNOC-RC) to do the Feasibility Study and Detailed Engineering Design while development, construction and installation will be a partnership among PNOC-RC, Electric Cooperatives and private sector. – Joint Venture Agreement (JVA) = 50% Rural Electric Cooperative → Up to 10% PNOC-RC → Up to 40% Private Investment Secured Power Sales Agreement /Electricity Sales Agreement between RECs and JVA
  128. 128. 127 Road Transport and Flood Management Department of Public Works and Highways Secretary Rogelio L. Singson
  129. 129. 128 Status of Philippine Road Network Improved Road Condition Legend Road Classification National Arterial National Secondary 215,088 kms Total Overall Road Network 31,598 kms Total National Road Length 0.72 km/sq. km Road Density 0.26 km/sq. km Paved Road Density 0.27 Overall Paved Road Ratio 0.80 Paved Road Ratio for Nat’l. Roads
  130. 130. 129 Better Infrastructure is Improving Country’s Competitiveness Better quality roads are being noticed Quality of Roads 1 = extremely underdeveloped; 7 = extensive and efficient by international standards Ranking of the Philippines significantly improved from no. 114 (2010-2011) to no. 87 (2013-2014) in the quality of roads indicator in the WEF Global Competitiveness Index 0.0 1.0 2.0 3.0 4.0 5.0 6.0 Malaysia Thailand Indonesia Vietnam Philippines 2010-2011 2011-2012 2012-2013 2013-2014

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