Aquino

Slide1 : Foreign Market Expansion for SMEs Through the Philippine Export Development Plan (PEDP) 2005 – 2007 DOST Forum March 16, 2005


Slide2 : Framework, Planning Process State of RP Exports Global Outlook and Export Targets Strategies Policy and Financial Requirements Implementation Contents of the Plan


Framework of the PEDP : Relevant provisions of the MTPDP 2004 – 2010 Chapter 1: Trade and Investment Section II Goals, Strategies and Action Plans A. Targets B. Strategic Measures E. Action Plans 5. Investments 6. Exports Framework of the PEDP Part I…cont’d Legacy of PEDP 2002 – 2004 Competitiveness as a continuing driving force


Planning Process : Initial research on global market situation, actual supply condition and RP export performance as basic inputs Inter-agency consultations with DA, DOST, DOH, DENR, TESDA, BOC, NEDA, BSP, and DTI Sectoral consultations in collaboration with Philexport in Cebu, Davao and Manila Viewpoints from EDC members and ExCom Presidential approval Planning Process Part I…cont’d


Slide5 : Part II: State of RP Exports Source: NSO; PEDP 2002-2004; World Bank Global Economic Prospects 2005 Export record was positive 2003 slow down in demand for RP electronics exports Continued strong growth in global trade Uptrend in global trade enabled RP merchandise exports to diversify (In percent)


Slide6 : Source: NSO; Jan-Nov …resulting to better market distribution… Shift in Key Markets’ Share of RP Merchandise Exports (2001 & 2004), % Part II…cont’d 2001 2004 US$ 31.5B US$ 39.6B


Slide7 : Source: NSO and thus… a balanced market mix Key Markets’ share to RP Merchandise Exports, % Part II…cont’d Orders of electronics shifted from US to China Japan recovery pulled up ASEAN market Stricter EU & US import regimes


Slide8 : Enlargement of export base… Part II…cont’d 2001 2004 RP Merchandise Exports by Products (2001 & 2004), % share REVENUE STREAMS Source: BETP managed Tradeline Phils. Database; Jan-Nov US$ 31.5B US$ 39.6B


Slide9 : …geared up momentum for continued diversification Revenue Streams (% share) Source: BETP managed Tradeline Phils. Database Part II…cont’d


Slide10 : Source: BETP managed Tradeline Phils. Database; Jan-Nov New product ranges moved up the value chain Decline in products that faced stiff competition cushioned by corresponding increase in new products Revenue Streams: a profile of growth average growth rate (%) Sub- categories


Slide11 : Part III: Global Outlook and Export Targets World market expected to grow moderately (% GDP change in real terms) Sources: Global Economic Prospects 2005 World Bank - Washington; China Economic Update 2005 World Bank-China ADB Development Outlook 2004 Updates


Slide12 : Part III…cont’d Global outlook Sources: Global Economic Prospects 2005 (World Bank-Washington) China Economic Update 2005 (World Bank – China)


Slide13 : World Japan & USA European Union China Source: IMF World Economic Outlook, September 2004 World Imports of goods and services (in real terms) Value of World Imports: (US$ Trillion, CIF ) 11.2 Part III…cont’d 2004 2005 0 2 4 6 8 10 6.8 5.7 5.2 7.1 9.4 6.4 5.4 5.8 7.9 7.9 Trade growth: Asia to outpace the world 10.4 ASEAN Annual growth %


Slide14 : Source: MTPDP 2004 – 2010, p. 5, Table C; NSO Export expansion in a moderately growing world market Part III…cont’d


Slide15 : Market Strategy: Increase penetration and expand product range in key markets Part IV: Strategies ASEAN Maximize benefits from ASEAN Priority Integration Sectors (PIS) Confirm primacy of intra-ASEAN interest while seizing opportunities gradually arising from interaction with ASEAN dialogue partners Work for stronger ASEAN focus on BIMP-EAGA as counter balance to Mekong river basin development


Slide16 : Market Strategy: Increase penetration and expand product range in key markets Part IV: Strategies CHINA Acquire and/or maintain strategic business partnerships (guangxi): capitalize on emerging buyer preferences in securing niche market segments; and, hand-hold export-oriented investments Ensure commitments of market access are not hampered by barriers to trade (exports) facilitation at the local government level


Slide17 : Market Strategy: Increase penetration and expand product range in key markets Part IV: Strategies


Slide18 : Market Strategy: Increase penetration and expand product range in key markets Part IV: Strategies


Slide19 : Market Strategy: Increase penetration and expand product range in key markets Part IV: Strategies


Slide20 : Market Strategy: Pursue specific culture-based trade opportunities Part IV: Strategies * Islamic Dawa’h Council of the Philippines, Philippine Aw’qaf and Zakat Foundation, Ulama Conference of the Philippines, and Golden Mosque


Slide21 : Part IV…cont’d Productivity enhancing strategies for Revenue Stream products


Slide22 : Part IV…cont’d Productivity enhancing strategies for Revenue Stream products


Slide23 : Part IV…cont’d Productivity enhancing strategies for Revenue Stream products


Slide24 : Part V: Policy and Financial Requirements Policy implementation measures


Slide25 : Part V: cont’d… Policy implementation measures


Slide26 : Part VI: Implementation Communication Plan


Slide27 : Part VI: cont’d… Execution Guidelines DTI – lead implementing agency in the public sector Philexport – lead implementing organization in the private sector Funds sources – MOOE allotment of relevant government agencies, proposed funds for export development and promotion, and private sector counterpart funds.


Slide28 : Part VI: cont’d… Measurement of Success Attainment of PEDP 2005-2007 Targets: Export performance Job generation Share of priority sectors


Slide29 : List of Additional Information


Slide30 : A. Targets …Exports of goods and services are targeted to increase from US$42.81 [in 2004] to US$50 billion [in 2006] or a minimum growth of 10% every year as the government focuses on priority areas such as ICT, automotive, electronics, mining, healthcare and tourism…[italics supplied] Source: MTPDP 2004-2010, page 12, Chapter 1, Section 2


Slide31 : B. Strategic Measures Make food plentiful at reasonable prices to make labor cost globally competitive (Chapter 2: Agribusiness) Reduce the cost of electricity to make the cost of running the machines and manufacturing processes regionally competitive (Chapter 11: Power Sector Reforms) Modernize the physical infrastructure and logistics system at least cost to ensure efficient movement of goods and people (Chapter 6: Infrastructure) Mobilize and disseminate knowledge to upgrade technologies and increase people’s productivity (Chapter 19: Science and Technology) Reduce red tape in all government agencies to reduce transaction costs (Chapter 21: Anti-Corruption) Source: MTPDP 2004-2010, pages 12-13


Slide32 : E. ACTION PLANS Investments Draw up a more focused incentives package with focus on priority areas: Information Technology and IT-enabled Services Sector Automotive Electronics Mining Healthcare and Wellness Tourism Shipbuilding Fashion Garments Jewelry Agribusiness Source: MTPDP 2004-2010, page 15-17


Slide33 : E. ACTION PLANS Exports Maximize exports and investment opportunities offered by trade agreements Pursue market-driven strategy that will link our supply capacity closer to the high impact markets Simplify export and import procedures and facilitation Maintain existing and develop more competitive export products and services and diversify markets Legislative Agenda Source: MTPDP 2004-2010, pages 17-20


Slide34 : The President’s Quadrants of Competitiveness: Sustain and grow existing competitive products and services; Transform non-competitive products and services that have high probability of success, to become competitive global players; Transition non-competitive industries towards new competitive models giving sufficient time to address social and equity issues; Leverage government importation of products and services to achieve added-value concessions Source: PEDP 2002-2004


Slide35 : Product Development and Diversification: Ten Revenue Streams: Food Products Home Furnishings Microelectronics Motor Vehicle Parts and Components Marine Products Wearables IT-Related Services Giftwares and Holiday Decors Construction Materials Organic and Natural Products Source: PEDP 2002-2004


Slide36 : Estimated Exports of Non-Factor Services Source: Balance of Payments, BSP, annualized Jan-Sept 2004 (in US$ million)


Slide37 : average growth rate (%) Source: BETP managed Tradeline Phils. Database


Slide38 : average growth rate (%) Source: BETP managed Tradeline Phils. Database


Slide39 : average growth rate (%) Source: BETP managed Tradeline Phils. Database


Slide40 : average growth rate (%) Source: BETP managed Tradeline Phils. Database


Slide41 : GTEB (raw materials management until June ’05) Training & Skills Development Productivity Programs BPS BIS BETP CITEM FTSC BITR PTTC BOC TESDA DOLE DAP Others Private Sector Corporation (credit facility, marketing services, logistics consolidation, etc.) Liaison Projects Advocacy Legislative DOJ Executive (other agencies) CWTRG FUNCTION Regulatory Standards compliance Licensing Export facilitation/ consulting Research Promotions Sales International Negotiations ITG/SMEDG ITG SMEDG BOI Investment policy incentives Residual government functions devolved to existing agencies. Industry development function is privatized. FTSC BOC PEZA OSEDCs Source: Facing the Challenge of International Competition in a Freer Global Market Presentation of Senior Undersecretary Thomas G. Aquino to Secretary Juan B. Santos 11 February 2005 Maintaining Management Reliability: Survival of Philippine Garments Industry beyond MFA


Slide42 : Model OTOPs Source: DTI - ROG


Slide43 : ASEAN Priority Integration Sectors Country Coordinator Automotive Indonesia Wood-based Indonesia Electronics Philippines Rubber-based Malaysia Textiles and apparel Malaysia Air Transport Thailand Agro-based Myanmar Fisheries Myanmar Healthcare Singapore Tourism Thailand E-ASEAN Singapore


Slide44 : OSEDCs Contact Info


Export-enhancing infrastructures : Export-enhancing infrastructures Inter-modal transport system through the Strong Republic Nautical Highways (Western, Central, and Eastern Nautical Highway) and other road network, specifically those linking the export-oriented provinces, c.f. One Town-One Product (OTOP) e.g., Inabanga, Bohol : Woven raffia Bohol Circumferential Road (261 kms.; seaport to Inabanga: 70 kms.) Pagadian, Zamboanga del Sur : Seaweeds Pagadian-Zamboanga Road (approx. 282.5 kms. to Pagadian City) Paete, Laguna : Wood Carving & Paper Mache South Luzon Expressway (approx. 113 kms. To Paete) 2. Arterial Road Expressway to Batangas Port; Southrail to Bicol route Source: MTPDP 2004-2010, pages 78-82