Outlook for 2015: Exports as Lynchpin of Sustainable and Inclusive Growth

Transcription

1 Outlook for 2015: Exports as Lynchpin of Sustainable and Inclusive Growth EMMANUEL F. ESGUERRA Deputy Director-General NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY Philippine Exports Confederation 4 th Quarter General Membership Meeting October 21, 2014

2 Outline of Presentation I. Recent Economic Developments II. Export Data Targets vs. Actual III. Opportunities/Outlook for the Export Sector IV. Strategies to Increase Exports V. Philippine Export Development Plan

3 RECENT ECONOMIC DEVELOPMENTS The Philippine economy is on a high trajectory at the beginning of the current decade... 8,000,000 Philippine Real GDP at 2000 Prices (Millions Php) (1960 to 2013) 7,000,000 6,000,000 5,000,000 Real GDP growth 3.7% (2011) 6.8% (2012) 7.2% (2013) 4,000,000 3,000,000 2,000,000 1,000,000 0 Source: Philippine Statistics Authority (PSA)

4 RECENT ECONOMIC DEVELOPMENTS The acceleration in Q brought the GDP growth in the 1 st Semester back on the higher trajectory path. 1 st Sem st Sem 2014 GDP Growth 7.8% 6.0% By Industrial Origin Share to Growth Share to Growth GDP Rate GDP Rate Agri, Fishery, Forestry and Hunting Industry Of which: Manufacturing Services By Expenditure Household Final Consumption Gov t Final Consumption Capital Formation Of which: Fixed Capital of which: Public Construction Private Construction Durable Equipment Changes in Inventory Exports Imports Source: PSA

5 RECENT ECONOMIC DEVELOPMENTS While household spending continued to have the largest contribution to GDP on the demand side, investment is increasingly becoming a major driver of growth Average Contribution to Growth (ppt) 4.6% 5.0% 5.9% 7.2% 6.0% 2.7 ppts cont n to GDP growth of NX % 3.6% FY 2013 SEM I 2014 Household Consumption Government Consumption Capital Formation Net Exports Source: PSA

6 RECENT ECONOMIC DEVELOPMENTS Merchandise Exports Growth (3-Month Moving Average, in %) Comodity Group Aug 2014 (M-o-M Growth) August (Y-o-Y Growth) Jan-Aug (Y-o-Y Growth) Total Exports Total Agro-Based Products Forest Products Mineral Products Petroleum Products , Manufactures of w/c: Electronic Products Garments Wood Manuf Chemicals Source: PSA Machinery & Transport Equip Source: PSA

7 EXPORT DATA: TARGETS AND ACTUAL Barring any significant external shock, the Government is optimistic that 2014 merchandise export targets can be met amid failure to reach targets over the past few years (Baseline) * Target Actual Actual figures are from Philippine Statistics Authority (PSA) Targets are based on Philippine Development Plan Midterm Update using PSA data * January to August 2014 actual merchandise exports performance

8 EXPORT DATA: TARGETS AND ACTUAL as well as meeting the services export target for the year US$ bn (Baseline) * Target Actual Actual figures are from Bangko Sentral ng Pilipinas (BSP) Balance of Payments (BOP) Statistics Targets are based on Philippine Development Plan Midterm Update using BOP data * January to June 2014 actual services exports performance

9 OPPORTUNITIES/OUTLOOK FOR THE EXPORT SECTOR ASEAN integration brings to the table opportunities that can help the country in achieving inclusive growth... ASEAN Economic Community in 2015 GDP of US$2.3 trillion, nearly 620 million people EU Generalized Scheme of Preferences Plus (GSP+) European Commission favourably endorsed PH application Discussions on possible FTAs European Free Trade Association, Regional Comprehensive Economic Partnership, Trans-Pacific Partnership New markets Russia, Brazil, Middle East

10 KEY STRATEGIES TO INCREASE EXPORTS IMPROVED BUSINESS CLIMATE Streamline bureaucratic procedures Standardized fees/costs and processes in 27 out of the targeted 96 1 st class municipalities with the Regulatory Simplification for Local Government Reduced processing time and steps to register businesses From 10 to 5 steps from 1-3 months to 1-3 days in 1,202 (73.6%) of 1,634 LGUs under the streamlined Business Permit and Licensing System From 4 to 5 days to 30 min under the Philippine Business Registry From 4-8 hours to 15 minutes under the Enhanced Business Name Registration System

11 KEY STRATEGIES TO INCREASE EXPORTS IMPROVED BUSINESS CLIMATE Institutionalize Regulatory Impact Assessment across all government agencies Facilitate trade with National Single Window Accelerate infrastructure development

12 KEY STRATEGIES TO INCREASE EXPORTS ACCELERATE TRADE PROMOTIONS As of September 2014, PHL has participated in fourteen (14) trade missions abroad during the year to promote exports and tourism. Upcoming trade missions in India, France, South Korea, Indonesia, and Dubai

13 Committed and indicative projects to address power shortage... COMMITTED AND INDICATIVE POWER PROJECTS ( ) Number of Projects Committed Total Rated Capacity (MW) Number of Projects Indicative Total Rated Capacity (MW) Luzon 24 2,491.9 (50.1%) 34 9,840.8 (79.7%) Visayas (11.8%) (6.3%) Mindanao 16 1,891.7 (38.1%) 17 1,726.6 (14.0%) Total 53 4,971.2 (100%) 71 12,343.6 (100%) Source: Department of Energy as of May 31, 2014

14 KEY STRATEGIES TO INCREASE EXPORTS PRODUCTIVITY AND INNOVATIVE CAPACITY INCREASED Growth drivers Manufacturing Agro-industry Tourism IT-BPM Logistics Construction Examples of strategic plans, roadmaps Comprehensive National Industrial Strategy (based on the industry roadmaps) Manufacturing Revival Program (focus on increasing linkages) Integrated Coconut Industry and Poverty Reduction Roadmap Tourism Development Program Tourism cluster destinations: Central Visayas, MM & CALABARZON, Central Luzon, Western Visayas, etc. Next Wave Cities National Logistics Plan Core Infrastructure Investment Program

15 KEY STRATEGIES TO INCREASE EXPORTS PRODUCTIVITY AND INNOVATIVE CAPACITY INCREASED Strengthening MSMEs provision of technical assistance and continued implementation of MSME programs Small Enterprise Technology Upgrading Program (SETUP) Go Negosyo Act SME Roving Academy Shared Services Facilities

16 KEY STRATEGIES TO INCREASE EXPORTS PRODUCTIVITY AND INNOVATIVE CAPACITY INCREASED Enhancing competencies of labor force Pursue market-driven education and training Harness science, technology and innovation Strengthen the industry-academe collaboration

17 KEY STRATEGIES TO INCREASE EXPORTS MARKET ACCESS EXPANDED Maximize opportunities in regional and global integration Harmonize the National Quality Infrastructure (NQI) with internationally accepted QI Strengthen national brand awareness

18 Exchange Rate Performance, (f) High Low Actual Source: BESF , BSP

19 COMMENTS ON THE DRAFT PEDP Philippine Export Development Plan Seven Point Agenda Remove all unnecessary regulatory impediments to movement of goods Enhance domestic capacity to upgrade the quality and standards of export (Improve National Quality Infrastructure) Improve exporters access to trade finance using Aid-for Trade Set up an Export Promotion Fund (EPF) to assist exporters Strengthen the resource base of EMB as an Export Promotion Agency (EPA) Improve the efficiency of the producer services through regulatory reforms Design and implement comprehensive packages of export support and promotion programs for select industries

20 COMMENTS ON THE DRAFT PEDP The Updated PDP commits higher exports target than the draft PEDP 2016 EXPORTS TARGET, in US$ billion Updated PDP Draft PEDP Difference Merchandise Services Total Source of data: PDP Midterm Update, Draft Philippine Export Development Plan

21 COMMENTS ON THE DRAFT PEDP Comparative Advantage Areas o Pool of skilled workers. Move up the value chain by greater us of high quality services o Current Revealed Comparative Advantage: IT-BPM, business services o Potential Comparative Advantage on: Creative/knowledge-based services; medical tourism; tourism and travel related; Educational hub, recreational, cultural and sporting; aircraft maintenance, repair & overhaul; ship repair; construction and engineering Source: Asec. Aldaba, RTD on Services, 18 Sept. 2014

22 COMMENTS ON THE DRAFT PEDP Philippine Export Development Plan Diversify export products and adapt to global demands Finalize Comprehensive National Industrial Strategy Remove investment restrictions cited in the Foreign Investment Negative List Address supply chain gaps and power costs Increase value-added of exports Make education/skills more industry-appropriate Strengthen manufacturing-related services Promote Philippines as a preferred tourist and IT-BPM destination (esp. for high-value services)

23 Outlook for 2015: Exports as Lynchpin of Sustainable and Inclusive Growth EMMANUEL F. ESGUERRA Deputy Director-General NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY Philippine Exports Confederation 4 th Quarter General Membership Meeting October 21, 2014