Building Up
Philippine
Competitiveness
Ambassador Cesar B. Bautista
Co-Chair for the Private Sector
National Competitiveness Council
Bali, Indonesia
November 2007
1
The Economy
Period
1985-1992
1993-1998
19992004
% FDI/GDP
0.5 %
2.3%
1.4%
Exports, in
US$
$9.8 B
(’92)
$29.5 B
(’98)
$39.7 B
(’04)
% Export
Growth
4%
16%
12%
% GDP
Growth
average
2.1%
3.6%
4.3%
2
Total Philippine Merchandise Exports
In Billion Dollars
1991-2006
50
47.0
45
39.7
38.1
40
41.3
35.2 36.2
35.0
32.2
35
29.5
30
25.2
25
20.5
17.4
20
13.5
15
10
8.8
9.8
11.4
5
0
91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06
19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20
3
Contribution of Electronics Exports
In Billion Dollars
1991-2006
4
GDP by Industrial Origin
1991 vs 2006
2006
1991
Agriculture
22.7%
Services
42.5%
Industry
34.7%
Services
48.3%
Agriculture
18.8%
Industry
32.8%
5
Employed Persons by Industry Group
1991 vs 2006
1991
2006
Agriculture
35.8%
Agriculture
44.9%
Services
39.2%
Services
49.0%
Industry
15.9%
Industry
15.2%
6
Competitiveness Ratings
World Competitiveness
Yearbook (IMD) #49 out of
61
•Economic Performance
•Government Efficiency
•Business Efficiency
•Infrastructure
Doing Business (WB, 2007)
#126 out of 175
•Government Efficiency
•Institutions
Global Competitiveness
Report (WEF) #77 out of 117
•Macroeconomic Stability
•Openness and Market Size
•Institutions
•Business Sophistication
•Good Market Efficiency
•Labor Market Efficiency
•Financial Market Efficiency
•Infrastructure
•Personal Security
•Basic Human Capital
•Advanced Human Capital
•Technological Readiness
•Innovation
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Executive Order 571
• Issued by President Arroyo on 5 October 2006
• Created the National Competitiveness Council,
a Private-Public Task Force on Philippine Competitiveness
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Competitiveness Model
•Human Resources
•Management
•Access to Financing
•Infrastructure
•Transaction costs and
flows
•Energy
Firm strategy,
structure &
rivalry
Factor
Conditions
Demand
Conditions
Related &
supporting
industries
The Determinants of National Advantage
“Porter Diamond”
9
Competitiveness Summit
September 2006
• Series of Consultations (covering more than 1,000
participants)
• Representatives from business, government, NGOs,
development agencies, academe
ACTION AGENDA
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Take-off References
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Medium Term Philippine Development Plan 2004 - 2010
Philippine Export Development Plan 2005 – 07
National Export Congress Scorecards
Philippine Development Forum
31st Philippine Business Conference (PCCI)
2006 National Manpower Summit
2006 Roadmap for Export Competitiveness of Services
Sectors (EO 372, S. 2004)
EO 395, S. 1997
RA 9013
EO 428, S. 2005
ADB Country Report
AmCham Investment Climate Improvement Report
Current Efforts - Services Coalition, Private sector
efforts (e.g. PQAF, ECOP, MAP, PCCI, LGU-based
initiatives etc.)
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National Competitiveness Council
A. VISION
A Competitive Philippines by 2010
Instill Culture of Excellence
PPP as the Development Engine
B. MISSION
Implement the Action Agenda with Private Sector Initiatives that
Support Public Policies
- Competitive Human Resources
- Management Expertise in Specific Public Offices
- Financing to Micro and SMEs
- Reduced Transaction Costs and Improved Transaction Flows
- Upgrade Infrastructure (Transport)
- Reduced Energy Costs, Secure Supply
12
National Competitiveness Council
C. METRICS IN 2010
• Top 1/3 ranking in major international surveys
• Total investments at record level (FDI at 3-4% of GDP)
• New export services to generate $15B per year
13
NCC Organizational Structure
PUBLIC SECTOR
PRIVATE SECTOR
DTI Secretary
 Co-Chairs 
Amb CBBautista
DOF, DOTC, DepEd, NEDA
Amb DGDee, Amb RRRomulo
Dr. FMMacaranas, Mr. Gil Salazar
COMPETITIVE HUMAN RESOURCES
Atty Emerico de Guzman
EFFICIENT PUBLIC AND
PRIVATE SECTOR MANAGEMENT
Mr. Baltazar Endriga
EFFECTIVE ACCESS TO FINANCING
Mr. Sergio Ortiz-Luis, Jr.
IMPROVED TRANSACTIONS
FLOWS AND COSTS
Mr. David Balangue
SEAMLESS INFRASTRUCTURE
NETWORK
Mr. Meneleo Carlos, Jr
ENERGYCOST COMPETITIVENSS
AND SELF SUFFICIENCY
Dr. Francisco Viray
SPECIAL CONCERNS
(LEGISLATURE)
Mr. Francis Chua
SPECIAL CONCERNS
(OMBUDSMAN/JUDICIARY)
Atty Miguel Varela
NCC SECRETARIAT
Public-Private Sector
ED Boy Fulgencio – Mr. Ruy Moreno
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Stages of Innovation
A
IDEA
SUCCESS!
B
INNOVATION
+ ENTREPRENUERSHIP
+ FINANCE
= SUCCESS!
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Competitive Human Resources
Project
• Improve proficiencies in English,
Science and Math by 30% in 2010
Private Sector
Partners
-
A. Teacher Support Programs
•Mentoring the Mentors
•1000 Teachers Campaign
•Promote teaching profession/ advocacy
and image building
•Increase recruitment of teachers
Mirant Foundation,
PBed, Metrobank
Foundation, Ayala
Foundation, AmCham,
League of Corporate
Foundations
B. Student Support Programs
•Nutrition/School feeding program
• Pursue various OJT and dualtech projects
PMAP, PBED
League of Corporate
Foundations
-
Don Bosco, Hanns
Seidel Fdn, Meralco
Fdn, ECCP
16
Effective Access to Financing
Project
Private Sector
Partners
• Improve credit worthiness/capability of SMEs through assistance with the
business group
• Enhance the role of SME financing
approach
-
PCCI, FINEX
PhilExport
17
Efficient Public and
Private Sector Management
Project
Private Sector
Partners
• Develop programs to help cities
achieve world-class performance by
2008 and 20% of municipalities by
2010
-
MAP, ISA,
CDS
• Institutionalization of eGovernance in relevant government
offices mandated with business
related processes
-
PhilExport
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Improved Transaction
Costs and Flows
Project
• Improve the procedures for the entry
and exit of business persons
Private Sector
Partners
-
• Enhance the procedures for the entry and exit of goods
Foreign
Chambers
PCCI,
Philexport,
Port Users
Confederation
19
Seamless Infrastructure Network
Project
• Lighting of airports
Private Sector
Partners
- Domestic airlines
• Reduce “total” shipping cost (start with a couple of routes)
DMAP, UPS
20
Energy Cost Competitiveness
and Sufficiency
Project
Private Sector
Partners
• Real open access to distribution of power
• No-Nonsense Energy savings
Drive
-
PCCI, SEIPI
PCCI
21
Accomplishments
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Easier entry/exit of foreign investors
Reduction of some costs for exporters
Reduced power costs at PEZA for locators.
Aligned private sector corporate projects to help support the
increase in proficiency in English, Science and Math among
teachers and students.
Aligned private sector corporate initiatives to support a
systematic school-feeding program.
Encourage dual tech/OJT initiatives
Private initiatives at infrastructure projects
Training towards model cities by private sector
Training centers for SMEs in PEZA zones
22
Key Challenges
1. Effective partnership with Government officials
2. Strong network of companies, chambers, leaders,
NGOs, development partners
3. Align individual actions to the whole
4. Project financing outside government
5. Involve legislators and the judiciary
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Government ENABLES.
Business DRIVES and goes for GROWTH
• Economic growth depends upon the drive of business
(the engine of development)
• Business, government and society must be linked to
achieve goals
• Partisanship must be avoided
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How Can Businesses Lift
Philippine Competitiveness?
• Align your projects with the key actions of the
NCC
• HR: 30% improvement in English, Science and Math by
promoting teaching as a profession
• Financing: Improve SME capabilities by volunteering to
serve in SME Centers
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How Can Businesses Lift
Philippine Competitiveness?
• Work with your local officials to introduce new
NCC programs
• Introduce the Model Cities Program to your mayors or
governors
• Advocate for streamlining of business licensing processes
in your local governments
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How Can Businesses Lift
Philippine Competitiveness?
• Be actively involved with improvements in
infrastructures
• Encourage the PPP approach in electricity cooperatives
to maximize professional management and commercial
operations
• Introduce a business approach in allocating scarce
resources to key infrastructure projects – such as in
tourism development
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Competitiveness Begins With You!
From: MAGALING ANG PINOY…
To: MAGALING ANG PILIPINAS!
www.competitive.org.ph
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