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THE PHILIPPINE ADVANTAGE
Secretary Peter B. Favila
Department of Trade and Industry
PHILIPPINE ECONOMIC SCORECARD
 GDP growth of 5.6% (S2 2006)
Agriculture 5.2% - Industry 5.1% - Services 6.1%
 Fiscal performance on track
Jan to July 2006 revenue collections up by 20%
Deficit is PhP B34.1 lower year-on-year
 Philippine Peso is one of Asia’s best performing
currencies
4-year high bolstered by OFW remittance, exports and portfolio investments
 Headline inflation continued to ease at 6.5% (as of July
2006)
 Gross international reserves reached an all-time high
at US$21.3B (as of July 2006)
 Stable and low interest rate environment
2005 Milestones
5.1% GDP growth
3.9% Export growth
149.8% Net FDI growth
strong
performance
continues into
2006 . . .
FOREIGN TRADE
AND
INVESTMENT
PERFORMANCE
1st Semester 2006
5.6% GDP growth
16.8% Export growth
114.6% Net FDI growth
Strong export performance is supported by the
continuing diversification of merchandise
exports …
US$ 22.7B Exports in 1st Semester 2006
Top Exports (Jan to Jun 2006)
Electronics
Value (US$B) % Share
14.196
62.6
Automotive/Machinery
1.225
5.4
Garments
1.208
5.3
Minerals/Petroleum products
0.771
3.4
Other Consumer and Industrial
2.196
9.7
Food/Agro-based products
2.088
9.2
Source: DTI-Tradeline (derived from primary NSO data)
… and the rise of new markets and expansion
of trade relations.
EXPORT PERFORMANCE BY REGIONAL BLOCS
Jan-Jun 2006
2000
Other
Hong Kong Countries
5.0%
7.8%
Taiwan
Japan
14.7%
7.5%
China
1.7%
ASEAN
15.7%
Other
Hong Kong Countries
7.1%
7.4%
Taiwan
3.9%
Japan
17.6%
China
8.9%
U.S.
29.5%
E.U.
17.9%
Source: BETP (derived from primary NSO data)
ASEAN
18.1%
U.S.
17.6%
E.U.
19.3%
FDI flows remain on the uptrend . . .
1000
FOREIGN DIRECT INVESTMENT,
net (US$M)
500
0
S1 2004
Source: Bangko Sentral ng Pilipinas (BSP)
S1 2005
S1 2006
. . . and investment approvals signal that the
growth trend will continue.
Total approved investments at US$ 2B in 1st Semester 2006
BOI-PEZA Approved Investments by Sector
January – June 2006
Real Estate,
Renting and
Business
Activities
8%
IT Services
5%
Others
3%
Wholesale &
Retail Trade
25%
Infrastructure/
Industrial
Manufacturing
Facilities
18%
42%
Sources: Board of Investments (BOI) and Philippine Economic Zone Authority (PEZA)
POLICY DIRECTIONS
 Continued fiscal consolidation
 Countrywide development through
the super regions
 Increased infrastructure spending
 Clear agenda for competitiveness
 Reforms for good governance
Macroeconomic achievements are carried
through at the operating level . . .
 A more responsive government and a
business-friendly environment
 Focus on infrastructure development and
competitiveness-enhancement
 Emergence of new growth industries
Renewed investor confidence
THE PHILIPPINE ADVANTAGE IN e-SERVICES
Location, Location, Location
 Strategic location in Asia
 Strong infrastructure support
 Centrally-located IT parks
Supportive Regulatory
and Policy Environment
 Government priority
 Incentives package
Significant Impact on Bottomline
 Human resource advantage
 Efficiency and productivity
 Cost savings – IT personnel, real
estate, telecoms
Discover
The
Philippine
Advantage!