ARANGKADA Third Anniversary Assessment

8/12/2019 ARANGKADA Third Anniversary Assessment

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Feruary Makati Shangri-La


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iv ARANGKADA PHILIPPINES 3rd

ANNIVERSARY ASSESSMENT


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Rating Tally Tally

2011 2012 2013

TallyPercentage Percentage Percentage

Completed

Substantial Progress

Started

Not Ongoing

Backward / Regression

No Longer Relevant

5

36

191

168

51

11

1.08%

7.79%

41.34%

36.36%

11.04%

2.38%

2.38%

16.02%

44.37%

29.00%

5.41%

2.81%

4.11%

20.35%

46.10%

20.35%

5.63%

3.68%

11

74

205

134

25

13

19

94

213

94

26

17

2011 2012 2013

Tally

232

Tally

290

Tally

326

Percentage

51.44%

Percentage

64.59%

Percentage

73.26%

2011 2012 2013

Tally

219

Tally

159

Tally

120

Percentage

48.56%

Percentage

35.41%

Percentage

26.97%


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vi ARANGKADA PHILIPPINES 3rd


Tally

285

50

112

Progress

Steady

Declined

Improved

Percentage

63.33%

11.24%

25.17%


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SETIO

OT

L

B

O

St

SP

Stea

dy

Dec

line

d

Improv

ed

PartroingTooSlo

PartBecomingMoreompetitive

Agriusiness

BusinessProcessOutsourcingBP

O

reativeIndustries

Manufacturing

Logistics

Mining

Tourism

MedicalTravelandetire

ment

InfrastructurePolicy

InfrastructureAirports

InfrastructurePoer

Infrastructureoadsails

InfrastructureSeaports

InfrastructureTelecommunications

Infrastructureater

Businessosts

EnvironmentandaturalDisaster

ForeignEuityandProfessionals

overnance

udicial

Laor

Legislation

Localovernment

MacroeconomicPolicy

Security

SocialServicesEducation

SocialServicesHealthandPopula

tion

SocialServicesPoverty

Ac

tive

Dorman

t


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viii ARANGKADA PHILIPPINES 3rd


First Anniversary Assessment esults

Second Anniversary Assessment esults


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Second Anniversary Assessment 2012

Completed


Started

Not Ongoing


No Longer Relevant

11

74

205

134

25

13

(2.38%)

(16.02%)

(44.37%)

(29.00%)

(5.41%)

(2.81%)

First Anniversary Assessment 2011

Completed


Started

Not Ongoing


No Longer Relevant

5

36

191

168

51

11

(1.08%

(7.79%

(41.34%

(36.36%

(11.04%

(2.38%

Steady 63.33%

Deteriorated 11.24%

Improved 25.17%

2013

2012

2011

290 (64.59%)

232 (51.44%)

326 (73.26%)

159 (35.41%)

219 (48.56%)

120 (26.97%)

Third Anniversary Assessment 2013

Completed


Started

Not Ongoing


No Longer Relevant

19

94

213

94

26

17

(4.11%)

(20.35%)

(46.10%)

(20.35%)

(5.63%)

(3.68%)

OVERALL TALLY

PROGRESS OF RATINGS


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x ARANGKADA PHILIPPINES 3rd



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xii ARANGKADA PHILIPPINES 3rd



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xiv ARANGKADA PHILIPPINES 3rd


2013

2012

2011

Active Dormant

Active Dormant

Active Dormant

2013

2012

2011

Active Dormant

Active Dormant

Active Dormant

2013

2012

2011

Active Dormant

Active Dormant

Active Dormant

2013

2012

2011

Active Dormant

Active

Active Dormant


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2013

2012

2011

Active Dormant

Active Dormant

Active Dormant

2013

2012

2011

Active Dormant

Active Dormant

Active Dormant

2013

2012

2011

Active Dormant

Active Dormant

Active Dormant

2013

2012

2011

Active Dormant

Active Dormant

Active Dormant


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xvi ARANGKADA PHILIPPINES 3rd


2013

2012

2011

Active Dormant

Active Dormant

Active Dormant

2013

2012

2011

Active Dormant

Active Dormant

Active Dormant

2013

2012

2011

Active Dormant

Active Dormant

Active Dormant

2013

2012

2011

Active Dormant

Active Dormant

Active Dormant


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x

2013

2012

2011

Active Dormant

Active Dormant

Active Dormant


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xviiiARANGKADA PHILIPPINES 3rd


Survey Year2012

Ranking2013

RankingTrend

PreviousASEAN-6Ranking

2013 ASEAN-6 Ranking

TrendDate of Previous

Press Release(Est.) Date ofNext Release

1. Best Countries forBusiness

2013 87 of 141 90 of 145 Deteriorated 5 of 6 5 of 6 Stable Dec. 2013 Dec. 2014

2. Failed States Index1 2013 56 of 177 59 of 178 Improved 6 of 6 6 of 6 Stable Jun. 24, 2013 Jun. 2014

3. Index of EconomicFreedom

2013 107 of 179 97 of 177 Improved 4 of 6 4 of 6 Stable Jan. 10, 2013 Jan. 2014

4. WorldCompetitivenessYearbook

2013 43 of 59 38 of 60 Improved 5 of 52 5 of 52 Stable May 30, 2013 May 2014

5. InternationalProperty Rights Index

2013 87 of 130 77 of 131 Improved 5 of 63 4 of 6 Improved Sept. 20, 2013 Sept. 2014

6. CorruptionPerception Index

2013 105 of 174 94 of 177 Improved 4 of 6 3 of 6 Improved Dec. 2013 Dec. 2014

7. Human DevelopmentReport

2013112 of 187

114 of186

Deteriorated4 of 64

(2011)4 of 6 Stable Mar. 14, 2013 Mar. 2014

8. E-GovernmentReadiness Survey5

2012 88 of 190 -- -- 4 of 6 -- Mar. 6, 2012 Mar. 2014

9. Doing Business6 2013 136 of 183138 of185

Deteriorated 6 of 6 6 of 6 Stable Oct. 23, 2012 Oct. 2013

10. Investing AcrossBorders7

201087

countries-- -- -- -- -- Jul. 7, 2010

Before end of2012

11. Paying Taxes12 2013 135 of 183143 of185

Deteriorated 5 of 6 6of 6 Deteriorated Nov. 21, 2012 Nov. 2013

12. GlobalCompetitiveness Report

2013 65 of 144 59 of 148 Improved 5 of 6 5 of 6 Stable Sept. 4, 2013 Sept. 2014

13. Global EnablingTrade Report8

2012 72 of 132 -- Improved 6 of 6 -- -- May 23, 2012 May 2014

14. Travel & TourismCompetitiveness9

201372 of 139

(2011)82 of 140 Deteriorated 4 of 6 6 of 6 Deteriorated Mar. 7, 2013 Mar. 2015

15. EnvironmentalPerformance Index10

2012 42 of 16311 -- -- 3 of 6 -- -- Jan. 25, 2012 Jan. 2014

1A Failed States Index ranking closer to 0 means closer to complete state failure.2The 2012 and 2013 World Competitiveness Yearbook did not include Vietnam.

3The 2013 IPRI stated that the Philippines was at par with Vietnam.4THE UNDP, as per its database, did not publish a 2012 Human Development Report.

5The UN E-Governance Readiness Survey is a biennial report previously published in 2010.

6The 2013 Report was published in October 2012. The latest is the Doing Business 2014 which published on Oct. 2013, Philippines rank 108 of 189.7Investing Across Borders is a biennial report due out before the end of 2012; previous report was published in 2010.

8The Global Enabling Trade Report is a biennial report. The previous report was published in 2010. It does not include all 6 major ASEAN economies.

9The World Economic ForumsTravel and Tourism Competitiveness Report is supposedly a biennial report first published in 2007(with the exception in 2008 when a report was published).10

The Environmental Performance Index is a biennial report, previously published in 2010, first r eleased in 2006.11Based on the New Series of Environmental Performance Index. Based on the 2012 report, but latest data is 2010; this series was revised and is not comparableto the data released in2006, 2008 and 2010 due t o methodological refinements12

Paying Taxes for 2013 is published on 2012. The latest is Paying Taxes 2014published on Nov. 19, 2013, Philippines rank 131.

Progress Data

World

Ranking

Improved Rankings (both 2012 and2013)

8

Stable Rankings 0

Deteriorated Rankings 4

Unreleased (2013) 3

AS

EAN-6

Ra

nking

Improved Rankings 3

Stable Rankings 6

Deteriorated Rankings 2Unavailable 4

Sources1 Forbes Magazine2 Foreign Policy Magazine / The Fund for Peace3 Heritage Foundation / Wall Street Journal4 International Institute of Management Development5 Property Rights Alliance6 Transparency International7 United Nations Development Programme8 United Nations Public Administration Network9 World Bank10 World Bank11 World Bank12 World Economic Forum

13 World Economic Forum14 World Economic Forum15 Yale Center for Environmental Law and Policy


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There is no other time in our history where so manyfavorable factors are converging in our favor: oureconomy is robust and getting stronger, we have a youngand dynamic citizenry, the entire investment world isfocusing on us and giving us favorable marks, unlike theattitude in past years it is a rare time in our history.

- Ramon del Rosario Jr., Chairman, Makati Business Club, February 11, 2014


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Growing Too Slow

PART 1

Recommendations: 8

Progress:

Rating:

2 Improved 0 Declined 6 Steady

0 Backward/RegressionNo Longer Relevant0 1 Not Ongoing

3 Substantial ProgressStarted4 0 Completed

2013

2012

2011

Active Dormant

Active Dormant

Active Dormant


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2 ARANGKADA PHILIPPINES 3rd


PART 1

GROWING TOOSLOWWhile the macroeconomic fundamentals of the Philippines have been impressive, itsshare of foreign direct investments pales in comparison with those of other countriesin the region. If we do not make our economy attractive for foreign investments, we

would not be able to maximize the benefits from economic integration. Investmentswill pour in and factories will be built in our neighboring countries, and they will be

exporting goods to us while we export our workers to them to run their factories... amost sorry scenario.

- Speaker Feliciano R. Belmonte Jr., Meeting with Joint Foreign Chambers and Philippine Business Groups,

February 12, 2014

The three biggest challenges facing the Philippine economy are to move up to ahigher level of sustained growth, create more and better jobs, and make growthinclusive. After two decades (1980-2000) of negligible per capita GDP growth, percapita income has steadily increased from 2000 onwards as population growth easedand OFW remittances accelerated. Of the ASEAN-6, for the past five decades, the

Philippines had the lowest GDP and PCI growth, but from 1999 to 2013, real GDPgrowth improved, averaging 5.1% and tracking closely to Indonesia, Singapore, andThailand. From 2010 to 2013, GDP growth fell from 7.6% (2010) to 3.6% (2011),

Philippine Historical GDP and GNI Real Growth Rates, 1980-2013

Sources: NSCB (new linked series); Bernardo and Tang (2008)

-15%

-10%

-5%

0%

5%

10%

15%

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

GDP

GNI

Aquino, C Ramos Estrada Arroyo Aquino, B

EDSA 1

BOP & Powercrises/ Coup

AsianFinancial

Crisis EDSA2

Fiscalcrisis

GlobalFinancial

Crisis


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then rose to 6.8% (2012) and 7.2% (2013). This achieved the distinction of being the fastegrowing of the ASEAN-6 economies for two successive years. This is the first time in our daseries (beginning 1960) that the Philippines has placed first, hopefully the start of extendecatching up with the other regional economies. The Philippines has also lagged in job-creatinFDI within ASEAN, no matter what measures are usedabsolute, per capita, or percent of GD2013 saw a signifcant increase to a record level of $3.1 billion in the first nine months, for aestimated annual figure of $4.1 billion, almost 50% higher than the $2.8 billion in 2012, anover twice the $1.8 billion in 2011. This development placesArangkadastarget of $7.5 billio

a year within arms reach.

Recommendation 1

2011 Rating 2012 Rating 2013 Rating

Backward/Regression Substantial Progress Substantial Progress

Average Real GDP Growth Rates, % ASEAN-6, 1960-2013

Sources: World Bank; 2012 data - Country statistics offices (Philippines, Singapore and Vietnam); Media releases(Indonesia and Thailand) and authors estimates (Malaysia)

0%

2%

4%

6%

8%

10%

12%

1960-1970 1970-1980 1980-1990 1990-2000 2000-2010 2010-2013

IndonesiaVietnamPhilippinesMalaysiaSingaporeThailand

PART 1: GROWING TOO SLOW


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Recommendation 4


Started Started Started

Total Philippine Exports, 1990-2012, US$ Bn

Source: BSP (BOP concept)

-20%

-10%

0%

10%

20%

30%

40%

50%

-30

-15

0

15

30

45

60

75 Services, lhs

Goods, lhs

YOY growth



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Recommendation 5


Not Ongoing Started Started

Recommendation 6


Not Ongoing Not Ongoing Not Ongoing

Domestic Investments, % of GDP, ASEAN-6, 1990-2012

Countries 1990-1999 2000-2009 2010-2012 2011 2012

IndonesiaMalaysia

Philippines

Singapore

Thailand

Vietnam

Sources: ADB, Country Statistics Office (Malaysia and Thailand)

27.836.3

25.2

33.8

36.3

23.7

25.023.0

20.2

24.0

25.9

35.8

33.524.1

20.2

23.9

27.0

32.9

32.823.6

21.7

22.4

26.5

32.6

35.325.5

18.5

27.0

28.5

27.2


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Recommendation 7


Started Substantial Progress Substantial Progress

Gross Fixed Investments, % of GDP, ASEAN-6, 1990-2012

Sources: ADB and NESDB (Thailand QGDP series)

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Indonesia

Vietnam

Thailand

Singapore

Malaysia

Philippines



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Recommendation 8


Started Started Substantial Progress

Real GDP Growth Rates, ASEAN-6, 1990-2013

Sources: World Bank; 2012 data - Country statistics offices (Philippines, Singapore and Vietnam); Media releases(Indonesia and Thailand) and authors estimates (Malaysia); 2013f are from WEO forecast except for actual figuresfor Philippines and Singapore.

-15%

-10%

-5%

0%

5%

10%

15%

20%

Philippines

Indonesia

Thailand

Malaysia

Vietnam

Singapore


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Recommendations: 3

Progress:

Rating:


Becoming More Competitive

PART 2



2013

2012

2011

Active

Active

Active


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PART 2

BECOMING MORECOMPETITIVEMyanmar is opening up, Indonesia is making progress on infrastructure, and you havethe Philippines, which is a real bright spot in the region right now,... Thailand risks losing itsinternational competitiveness. Thats the real worry.

- Euben Paracuelles, Southeast Asia economist, Nomura, quoted in International New York Times, January31, 2014

While Filipinos are highly competitive in the world job market, the countrys domesticcompetitiveness has much room for improvement. Global rating surveys abound

with ever-expanding coverage stimulated by the globalization of investment, trade,and information. The Philippines was on a downward trajectory in internationalcompetitiveness rankings in the last decade but in recent years has reversed direction,making significant gains in closing gaps with several of its comparable regionaleconomies, especially in measures of corruption, governance, and infrastructure. Thisimprovement can be credited to more systematic efforts undertaken by the PhilippineGovernment through the National Competitiveness Council for several years to regaincompetitiveness. However, these efforts must be sustained and accelerated to producemore encouraging results faster.

Changes in 15 PH International Competitiveness Rankings, 2008-2013

Source: JV Pimentel, AmCham-TAPP, 2014

2008 2009 2010 2011 2012 2013

Improved Rankings 3 2 6 5 7 9

Deteriorated Rankings 5 10 6 6 3 1

Stable Rankings 4 1 1 0 2 2

Unreleased 3 2 2 4 3 3

0

2

4

6

8

10

12

No.ofRa

nkings

Expon.(ImprovedRankings )

Expon.

(DeterioratedRankings)


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10 Lessons on Competitiveness by Guillermo M. Luz (Private SectorCo-Chair, National Competitiveness Council - NCC)

1. Transparency leads to competitiveness.

2. Work in progress is not good enough.

3. Execution and delivery matter.

4. Teamwork is important.

5. We need to work on multiple fronts.

6. The competition never sleeps.

7. The bar always rises.

8. Speed to reform is important.

9. Maintaining momentum is important.

10. We need to institutionalize change.

Recommendation 1


Substantial Progress Substantial Progress Substantial Progress

PH Competitiveness Rankings, 2008-2013

Survey

2008 2009 2010 2011 2012 2013

Trend SourcesRanking

Forbes Magazine

Foreign Policy Magazine /The Fund for Peace

Heritage Foundation / WallStreet Journal

International Institute ofManagement Development

Property Rights Alliance

Transparency International

United NationsDevelopment Programme

United Nations PublicAdministration Network

World Bank

World Bank

World Bank

1. Best Countries forBusiness1

2. Failed States Index2

3. Index of EconomicFreedom

4. World CompetitivenessYearbook

5. International PropertyRights Index

6. Corruption PerceptionIndex

7. Human DevelopmentReport

8. e-GovernmentReadiness Survey5

9. Doing Business

10. Investing AcrossBorders6

11. Paying Taxes

91 of 121

59 of 177

98 of 156

40 of 55

62 of 115

141 of 180

90 of 177

66 of 182

141 of 183(2008-09)

87 coun-tries

126 of 178

91 of 128(2010)

51 of 177

109 of 178

39 of 58

80 of 125

134 of 178

97 of 169(2010)

78 of 183

134 of 183(2010-11)

87 coun-tries

135 of 183

87 of 141

56 of 177

107 of 179

43 of 59

87 of 130

105 of 174

112 of 187(2011)

88 of 190

138 of 185(2012-13)

87 coun-tries

135 of 183

87 of 134(2011)

50 of 177

115 of 179

41 of 59

87 of 129

129 of 182

112 of 187

-----

136 of 183(2011-12)

-----

124 of 183

90 of 145

59 of 178

97 of 177

38 of 60

77 of 131

94 of 177

114 of 186

-----

108 of 189(2013-14)

-----

143 of 185

Deteriorated

Stable

Improved

Improved

Improved

Improved

Stable

Deteriorated

Improved

-----

Deteriorated

84 of 127

53 of 178

104 of 178

43 of 57

74 of 115

139 of 180

105 of 182

-----

146 of 183(2009-10)

-----

129 of 181

PART 2: BECOMING MORE COMPETITIVE


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Survey

2008 2009 2010 2011 2012 2013

Trend SourcesRanking

12. GlobalCompetitivenessReport

13. Global EnablingTrade Report7

14. Travel & TourismCompetitiveness8

15. EnvironmentalPerformance Index9

World Economic Forum



Yale Center forEnvironmental Law andPolicy

71 of 134

82 of 118

81 of 130

41 of 132

85 of 139

92 of 125

-----

41 of 132

65 of 144

72 of 132

-----

41 of 132

75 of 142

-----

94 of 139

-----

59 of 148

-----

82 of 140

-----

Improved

Improved

Improved

Stable

87 of 133

82 of 121

86 of 133

42 of 132

Recommendation 2



Areas of Dissatisfaction %, Philippines, 2003-2013

Source: AmCham Gallup Surveys

88%84%

79%

73%

59%

40%

54%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Corruption

Laws and regulations

Infrastructure

Local Protectionism

Ease of moving products


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PART 2: BECOMING MORE COMPETITIVE

Recommendation 3


Substantial Progress Started Started

World Competitiveness, Percentile Rankings, Selected ASEAN Countries, 2001-2013

Sources: International Institute for Management Development and authors calculations

43rd

38th

010

20

30

40

50

60

70

8090

100

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Singapore Malaysia Thailand Indonesia Philippines


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Corruption Perceptions Index, Percentile Rankings, ASEAN-6, 1998-2013

Sources: Transparency International and authors calculations

129th

105th94th

0

10

2030

40

50

60

70

80

90

100

Singapore Malaysia Thailand Philippines Indonesia Vietnam

Ease of Doing Business, Percentile Rankings, ASEAN-6, 2006-2014

Source: World BankNote: 2014 data contains 2013 data; this one-year advanced reporting applies to the rest of previous reports

138th

108th

0

10

20

30

40

50

60

70

80

90

100

2006 2007 2008 2009 2010 2011 2012 2013 2014Singapore Thailand Malaysia Vietnam Indonesia Philippines

Global Competitiveness, Percentile Rankings, ASEAN-6, 2001-2013

Sources: World Economic Forum, authors calculation

87th

85th

75th

61st

59th

0

10

20

30

40

50

60

70

80

90

100

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Singapore Malaysia Thailand Indonesia Philippines Vietnam


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Recommendations: 18

Progress:

Rating:


Agribusiness

PART 3SEVEN BIG WINNER SECTORS



2013

2012

2011

Active Dorma

Active Dormant

Active Dormant


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PART 3

SEVEN BIG WINNER SECTORS

AGRIBUSINESSWith over one million Filipinos entering the labor force each year, the service sectoralone cannot absorb them all... No surprise, then, that poverty has barely declined inrecent years or that the countrys per capita GDP is the lowest among ASEANs core five.To reverse these trends, the country has to create jobs for semi- and unskilled workersin manufacturing and agriculture. But doing that, in turn, will require attracting moreforeign investment, which for the Philippines is currently among the lowest in Asia...

- Karen Brooks, former Asian Affairs Director, US National Security Council, Foreign Affairs, January-February 2014

Although 32% of employed Filipinos worked in agriculture in 2012, Philippine foodexports were less than 5% of the ASEAN-6 total that year. By contrast, Vietnam hastripled its share of the ASEAN total since 1997, while the share of the Philippinesactually declined. Growth in Philippine agricultural export value has been very slow,

while such exports of Indonesia, Malaysia, Thailand, and Vietnam skyrocketed 5-to8-fold in the past two decades. Nevertheless, the Philippines has very high potentialto export large quantities of specialized food products exploiting a multitude of new

market opportunities from present and future Free Trade Agreements (FTAs). Filipinofarmers face high domestic transport, labor, and other costs, and the Philippines lagsin integrating small farms into larger enterprises. Mindanao has great potential, bothto feed Luzon and to export. Long-standing farm infrastructure requirements needinvestment. The Comprehensive Agrarian Reform Program Extended with Revisions(CARPER), which ends in mid-2014, has greatly discouraged corporate farming.


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Recommendation 1


Started Not Ongoing Started

0%

10%

20%

30%

40%

50%

60% Indonesia

Thailand

Malaysia

Vietnam

Singapore

Philippines

Share in ASEAN-6 Agricultural Exports, 1990-2012

Source: WTO; No data for Vietnam before 1997

Recommendation 2



PART 3: SEVEN BIG WINNER SECTORS: AGRIBUSINESS


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0

10

20

30

40

50

60

19901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012

Indonesia

Thailand

Malaysia

Vietnam

Singapore

Philippines

Agricultural Products Exports, ASEAN-6, 1990-2012, US$ Billion

Source: WTO; No data for Vietnam before 1997

Recommendation 3




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Agricultural Goods and Food Exports, ASEAN-6, 2012, US$ Billion

Countries Agricultural goods

Exports Imports Trade Balance

Agricultural food exports,% of total agricultural

exports

Agricultural Area,in (000 Ha), 2009

Indonesia

Malaysia

Philippines

Singapore

ThailandViet Nam

Sources: WTO and FAO (for agricultural land area as of 2009)

45.0

33.9

5.1

9.9

42.025.0

0.7

0.8

0.9

0.9

0.70.8

54500.0

7870.0

12100.0

0.7

21060.010842.0

20.9

21.4

7.2

14.0

16.813.7

24.1

12.5

-2.2

-4.1

25.211.3

Recommendation 4



Recommendation 5





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Recommendation 6



Recommendation 7




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Coconut Products,37.8%

Sugar and RelatedProducts, 4.9%

Bananas, 17.9%

Other Fruits andvegetables, 15.4%

Other Agro-BasedProducts, 22.4%

Forest Products, 1.6%

Agriculture and Forest Products Exports Distribution, 2012

Source: NSO

Recommendation 8



Recommendation 9


Not Ongoing Not Ongoing Started



44/312



Recommendation 10



Recommendation 11



Recommendation 12




45/312

Recommendation 13



Recommendation 14





46/312



Recommendation 15



Recommendation 16



Recommendation 17




47/312


Recommendation 18


Backward/Regression Not Ongoing Not Ongoing


48/312


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Recommendations: 30

Progress:

Rating:


Business Process Outsourcing




2013

2012

2011

Active Dormant

Active Dormant

Active Dormant


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PART 3


BUSINESS PROCESSOUTSOURCING (BPO)

Business Process Outsourcing (BPO) has become an important business sectorbecause of its large size, high growth rate, and long-term potential to provide several

million quality jobs and earn high service export revenue. The Philippines has clearadvantages: a large workforce of educated, English-speaking talent with a strongcustomer-service orientation, a close cultural affinity to North America, highly reliablelow-cost international telecommunications, diverse and inexpensive site locations, andstrong government support. Drivers for success are being strengthened, while newreforms are also being sought to realize the high growth potential. A better industrylegal framework requires retaining fiscal incentives, fixing labor legislation that makesit more difficult to compete in the global market, and reducing the high numberof paid holidays which cost the industry tens of millions of dollars of unbudgetedexpenses for every new holiday declared. The Labor Code should be amended to allowsubcontracting and to make it easier to terminate employees.

0%

10%

20%

30%

40%

50%

60%

70%

0

5

10

15

20

25

30

2004 2005 2006 2007 2008 2009 2010 2011 2012 2016F

Revenues, lhs

YOY growth, rhs

Offshoring and Outsourcing Industry Revenues, BN US$, 2004-2016F

Sources: BPA/P


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Recommendation 1



Recommendation 2



PART 3: SEVEN BIG WINNER SECTORS: BUSINESS PROCESS OUTSOURCING


52/312



Recommendation 3


Backward/Regression Not Ongoing Backward/Regression

Recommendation 4


Backward/Regression Not Ongoing Started

Recommendation 5


53/312


Completed Completed Completed

Recommendation 6



Recommendation 7



Recommendation 8



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No Longer Relevant Completed No Longer Relevant

Recommendation 9


No Longer Relevant No Longer Relevant No Longer Relevant

Recommendation 10



Recommendation 11


55/312


Substantial Progress Completed Substantial Progress

Recommendation 12


Substantial Progress Completed Substantial Progress

Recommendation 13


Substantial Progress Completed Completed



56/312



Recommendation 14



Recommendation 15


Started Substantial Progress Started

Recommendation 16




57/312

Recommendation 17



Recommendation 18





58/312



Recommendation 19



Recommendation 20


Not Ongoing Substantial Progress Started

Recommendation 21




59/312

Recommendation 22



Recommendation 23



Offshoring and Outsourcing Industry Employment, in 000, 2004-2016F

Source: BPA/P

0%

10%

20%

30%

40%

50%

60%

70%

80%

0

200

400

600

800

1000

1200

1400

2004 2005 2006 2007 2008 2009 2010 2011 2012 2016F

Employment level, lhs

YOY growth, rhs



60/312



Recommendation 24



Recommendation 25



Recommendation 26




61/312


62/312



Recommendation 29



Recommendation 30




63/312

Recommendations: 16

Progress:

Rating:


Creative Industries




2013

2012

2011

Active Dormant

Active Dormant

Active Dormant


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PART 3


CREATIVEINDUSTRIESCreative industries are very diverse, including advertising, animation, architecture,broadcast arts, crafts, culinary arts, cultural/heritage activities, design, film, literature,

music, new media, performing arts, content development, mobile TV, publishing, andvisual arts. Filipinos enjoy a well-deserved reputation for creativity. However, to betterunderstand the sector, Philippine Creative Industries should be mapped and developed.There are legal issues that work against full development, such as limiting the practiceof foreign professionals, the ban on any foreign equity in media, and the limit of 25%foreign equity in advertising. The landmark Philippine Design Competitiveness Act of2013 was enacted in 2013 to spur further development of the sector.


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Recommendation 1



Recommendation 2


Substantial Progress Substantial Progress Completed

Recommendation 3



PART 3: SEVEN BIG WINNER SECTORS: CREATIVE INDUSTRIES


66/312



Recommendation 4



Recommendation 5



Recommendation 6


Started Substantial Progress Completed


67/312

Recommendation 7



Recommendation 8



Recommendation 9





68/312



Recommendation 10



Recommendation 11



Recommendation 12




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Recommendation 13



Clustered Industries UtilizingCreative Workers:

Examples of Creative and Knowledge Workers, 2013

Advertising Architecture Crafts Design Fashion Film and video Literature Music

Performing and visual arts Publishing Television and radio Video and computer games

Source: UNESCO-UNDP, Creative Economy Report: Special Edition [http://www.unesco.org/culture/pdf/creative-economy-report-2013.pdf] (New York: UN, 2013)

Business Process Outsourcing Engineering Design Financial Services Hardware and Systems Design Legal Services Medical and Healthcare Services Research and Development

Consulting Services

Software Development(non-entertainment Mobile PhoneApplications)

Website Development

Clustered Industries UtilizingKnowledge Workers:

Recommendation 14





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Recommendation 15



Recommendation 16




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Recommendations: 25

Progress:

Rating:


Policy

PART 3SEVEN BIG WINNER SECTORS - INFRASTRUCTURE



2013

2012

2011

Active Dorman

Active Dormant

Active Dormant


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PART 3


INFRASTRUCTURE:

POLICY"What we can expect in the years to come: airports and ports to facilitate commerce andtourism; roads to ensure that we all reap the maximum benefit from these big-ticketprojects; power plants that will generate enough energy and fuel the development ofindustry. All the infrastructure projects that are being and will be constructed will give rise

to a society teeming with opportunity. This is the framework from which other initiativeswill branch out, creating even greater opportunities for Juan and Juana de la Cruz."

- State of the Nation Address of President Benigno S. Aquino III to the Congress of the Philippines, BatasangPambansa Complex, Quezon City, July 22, 2013

What is wrong with Philippine infrastructure? To my mind, the problem boils downto three things: one, we dont have enough of them; two, they are not integrated andcoordinated; and three, they are improperly distributed. As a result, our competitivenessas an economy is severely handicapped.

- Cielito Habito, economist, January 6, 2014, No Free Lunch: Our Infrastructure Handicap

The Philippines significantly underinvests in physical infrastructure, with spendingaveraging 2% to 3% of GDP for the last 10 years, far below regional norms. However,for the Aquino Administration, poor infrastructure is a key inhibitor to higher investment.In the WEF Global Competitiveness Report, the countrys overall infrastructure qualityranks below Singapore, Malaysia, Thailand, and Indonesia and close to Vietnam.

Arangkadacontains lists ofmajor projects completed,under construction, orbeing financed as wellas future projects all

from 2001 to 2020.Recommendations concernoverall infrastructurepolicy and are followedby specific sub-sectionsfor Airport, Power, Roadsand Rail, Seaports,Telecommunicaitons, and

Water.

Quality of Overall Infrastructure Rankings, ASEAN-6, 2008-2014

Source: WEF Global Competitiveness Reports;

1

21

41

61

81

101

121

1412008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Sin

Mal

Tha

Ind

Phil

Viet

SingaporeMalaysia

Thailand

Indonesia

Philippines

Vietnam


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0%

1%

2%

3%

4%

5%

6%

0

50

100

150

200

250

300

350

400

450 Other capital outlays, lhs

Infrastructure, lhs

Total capital outlays, % of GDP, rhs

Infrastructure spending, %of GDP, rhs

National Governments Infrastructure Spending and Other Capital Outlays, 1990-2013, Bn Php

Sources: DBM and authors calculations; Note: Other capital outlays include capital transfers to LGUs (20% of IRA allocation for developmentprojects), special shares to LGUs and other capital outlay items not classified elsewhere but net of corp equity (all in obligation basis)



PART 3: SEVEN BIG WINNER SECTORS: INFRASTRUCTURE: POLICY


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Started No Longer Relevant Substantial Progress


Backward/Regression Started Substantial Progress


75/312


Substantial Progress Completed Completed




Not Ongoing Backward/Regression Not Ongoing



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Householdelectrifica-

tionrate, 2010

Distribu-tion losses

as % oftotal net

gen-eration1,

2010

Quality ofelectricity

supplyscore(WEF)2012

Main fixedtel linesper 100inhabit-

ants, 2011

Mobilephone

subs per100 inhab-

itants,2011

Share ofpopula-tion withaccess toimproved

water

sources, %,2010

Share ofpopula-tion withaccess toimprovedsanitation,

%, 2010

Roaddensity -

Populationper km

of road2,2011

Pavedroads

as % oftotal roadnetwork2,

2011

Key Infrastructure Indicators, ASEAN-6, 2010-2012

Indonesia 73.0 3.9 9.9 15.9 97.7 82.0 54.1 488 63.1

Malaysia 99.4 5.9 6.9 14.7 127.0 99.7 95.7 184 81.1

Philippines 83.3 3.7 12.1 7.2 92.0 92.5 73.9 431 23.5

Singapore 100.0 6.7 7.3 38.9 149.5 100.0 100.0 1,519 100.0

Thailand 87.7 5.5 6.7 9.7 113.2 95.7 95.7 607 94.5

Vietnam 97.6 3.1 10.1 11.5 143.4 94.8 75.9 298 64.4

Sources: US EIA, ITU, WHO-UNICEF JMP, UN Stats Div, ASEAN-Japan Transport Partnership, ASEAN Secretariat, World Bank & authors calculations1 - Derived using data from World Energy Outlook Database 2012 (IEA)

2 - This refers to the entire road network; Vietnam data - 2010


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Started Not Ongoing Completed


Not Ongoing Not Ongoing Completed


Not Ongoing Started Not Ongoing



78/312










79/312








Backward/Regression Started Substantial Progress



80/312








Substantial Progress Substantial Progress Started


81/312







82/312


83/312

Recommendations: 15

Progress:

Rating:


Airports




2013

2012

2011

Active Dormant

Active Dormant

Active Dormant


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PART 3


INFRASTRUCTURE:

AIRPORTSThe past five years have been one of lost opportunities and meandering drift formost in the aviation business due to restrictive sanctions imposed on us. In many

ways, CAAPs loss of credibility as a regulator among the international civil aviation

community has affected the manner by which most of you have conducted and plannedyour operations... I say, innovation and diligence are the answers. We need to keepour sector, on average, at par with global norms and, at best, ahead of internationalstandards.

- Director-General William Hotchkiss, Civil Aviation Authority of the Philippines (CAAP) at the 1st PhilippineAviation Safety and Good Corporate Governance Symposium, Pasay City, August 30, 2013

With its archipelagic character, the Philippines depends on air and sea transport muchmore than continental countries do. Since affordable airfares have stimulated domestictourism, Filipinos are flying in record numbers. But the Philippines does not build airportand terminal capacity before demand as do competing economies. New terminalsand modern equipment are badly needed, as are more direct international flightsto secondary cities. The absence of a modern international gateway airport restrictstourism, trade, and investment - in short, it is a major turnoff for international visitors.Clark and Subic have great potential for passenger and cargo operations. In many Asianairports - Beijing, Jakarta, Kuala Lumpur, Seoul, and Singapore - terminal capacity is

being increased.Mumbai hasopened aspectacular US$2billion terminal

at ChhatrapatiS h i v a j iI n t e r n a t i o n a l

Airport. The highstandards beingset by these Asianneighbors shouldbe emulated bythe Philippines.

1

21

41

61

81

101

121

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Singapore

Malaysia

Thailand

Indonesia

Vietnam

Philippines

Quality of Air Transport Infrastructure Rankings, ASEAN-6, 2008 to 2013

Source: WEF Global Competitiveness Reports; Note: Number of countries evaluated - 2008-134; 2009-133;2010-139; 2011-142; 2012-144; 2013-148


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Not Ongoing Not Ongoing Backward/Regression





PART 3: SEVEN BIG WINNER SECTORS: INFRASTRUCTURE: AIRPORTS


86/312




Not Ongoing Backward/Regression No Longer Relevant


Substantial Progress Substantial Progress Started


87/312









88/312




Start - Substantial Progress Substantial Proagress Substantial Progress




Started Substantial Progress Completed


89/312

-30%

-20%

-10%

0%

10%

20%

30%

-21

-14

-7

0

7

14

21

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

-H1

Passengers, Mn

Growth

Domestic Air Transport Passengers, 1990-2013

Source: CAB. 2013 figures are not comparable as they only cover H1.


Not Ongoing Not Ongoing Completed





90/312




Start - Substantial Progress Started Started



Shenzhens new airport terminalSource: http://www.theverge.com/2013/11/28/5154484/baoan-international-airport-terminal-3-studio-fuksis-design


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PART 3


INFRASTRUCTURE:

POWERToday many questions have been raised on whether EPIRA was a success. I submit that,

while there has been a delay, a fair call is so far, so good. EPIRA has provided theframework for the restructuring of the Electric Power Industry, including privatization

of National Power Corp.s assets, defining the responsibilities of various governmentagencies and the private sector, and transitioning to a functioning competitive structure.The end goal was to make sure we had an ample and reliable supply of electricity, atreasonable and competitive rates.

A common complaint has been that under EPIRA, power rates have actually gone upfaster, and that, as a consequence, we now have the highest power rates in the region.

While it is true that our rates are higher than our neighbors, this is because substantialsubsidies have been removed as mandated under EPIRA so that true cost of power isadhered to while our neighbors continue to subsidize.

On the recent suspension of payments to Meralco and operators of Gencos -- thisis a gift to the Filipino people as headlined only if the law of supply and demandhas been suspended in the Philippine islands. What actually needs to be done is tode-risk the sector from political and regulatory uncertainty to make the market workand encourage more investments, yielding more competition, ample supply andreasonable, less volatile tariffs.

- Romeo L. Bernardo, BusinessWorld, January 26, 2014

The Philippines is completing a decade-long transition from an inefficientpublic sector power generation monopoly to a private sector-led open access

competitive environment with enhanced regulatory oversight. Electricity pricesare among the highest in Asia and there are actual or potential supply shortagesin all three grids. Unreliable, expensive electric power is a major deterrent toinvestment. Under the open access policy, rates in the medium term should godown after more efficient generating plants are commissioned that are profitableat lower costs. With the five conditions precedent to open access met, the long-awaited reform began in mid-2013. However, only one large baseload plant


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has opened in Luzon in the the last decade. Underinvestment in power is likely to continuunless there is a clear and stable energy policy, without legislative or judicial interferencBlackouts could occur in Luzon if more plants are not built soon. Renewable energy annuclear technology offer excellent prospects for diversifying power sources. It is essentithat the transmission and distribution network expands in line with generation and growin demand.


Started Backward/Regression Started


Backward/Regression Backward/Regression Started

PART 3: SEVEN BIG WINNER SECTORS: INFRASTRUCTURE: POWER


94/312




Backward/Regression Backward/Regression No Longer Relevant


Started Not Ongoing Not Ongoing


No Longer Relevant Not Ongoing No Longer Relevant


95/312


Started Started Backward/Regression


Backward/Regression - Not Ongoing Not Ongoing Not Ongoing


Started No Longer Relevant Backward/Regression



96/312




No Longer Relevant Backward/Regression No Longer Relevant


Backward/Regression No Longer Relevant No Longer Relevant




97/312


Not Ongoing No Longer Relevant Started


Started Backward/Regression Started

Installed Generating Capacity, 2012

Source: DOE

Diesel/Oil, 18.1%

Hydro, 20.7%

Geothermal, 10.9%

Coal, 32.7%

Non-conventional, 0.9%

Natural Gas, 16.8%

Power Generation by Source, 2012

Source: DOE

Oil-Thermal, 1.0%

Diesel, 0.5%

GasTurbines, 0.3%

Hydro, 14.1%

Geothermal, 1

Coal, 38.8%

Non-conventional, 0.4%

Natural Gas, 26.9%



98/312




Started No Longer Relevant Backward/Regression




99/312


Started Started Backward/Regression


Backward/Regression Backward/Regression Not Ongoing


Backward/Regression Not Ongoing No Longer Relevant



100/312





0

5

10

15

20

25

30

Japan(Kansai)

Philippines,Manila

Singapore Sri Lanka Hong Kong,China

Malaysia Thailand SouthKorea

Taipei,China

Indonesia

Estimated subsidy

Paid by consumers

Average Retail Electricity Tariffs, June 2012, Selected Asian Countries, USc/kWh

Source: DOE




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2013Projects

2014

Projects

2015

Projects

2017

Projects

0

1500

3000

4500

6000

7500

9000

10500

12000

13500

15000

16500

18000

Peak demand Required reserve margin Available Capacity Available Capacity + Commited Projects

Required Reserve Margin and Peak Demand Estimates, Luzon, in MW, 2013-2030

Source: DOE; Note: 2013 Projects (Mariveles Bataan Expansion Project Phase 2(600MW) in May, Maibarara Geo (20MW) in Oct), 2014Projects (Putting Bato Phase 1 (135MW) in Aug, Pililia Wind (67MW) in Sept, SJCI Biomass (9.9MW) in Nov, Southwest Luzon 1 (150MW)in Dec), 2015 Projects (Southwest Luzon 2 (150MW) in Mar, Isabela Biomass (20MW) in Mar, Putting Bato Phase 2 (135MW) in Nov); 2017Projects (Mariveles Bataan Expansion Project Phase 2(600MW) in Dec)


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Required Reserve Margin and Peak Demand Estimates,Visayas, in MW, 2013-2030

Source: DOE; Note: 2014 Projects (Villasiga HEP (8MW) in Mar, Nasulo Geo (50MW) in Jun, Toledo Expansion (82) MW inSept), 2015 Projects (Sn. Carlos Biomass (16MW) in Mar, ASIAN Biomass (3.6MW) in Jun), 2016 Projects (Concepcion Coal1 (135MW) in Jul, Concepcion Coal 2 (135MW) in Sept)

2014Projects

2015Projects

2016Projects

0

500

1000

1500

2000

2500

3000

3500

4000


: ; : ill i i l i l i i

l i i I i i i l i l i l i

Required Reserve Margin and Peak Demand Estimates,Mndanao, in MW, 2013-2030

Source: DOE; Note: 2013 Projects (EEI HFO (15MW) in Aug, Mapadalad (15MW) in Oct), 2015 Projects (Therma South(300MW) in Mar, Sarangani Coal (200MW) in Sep), 2016 Project (Mt Apo (50MW) in Jun)

2013Projects

2015Projects

2016Project

0

500

1000

1500

2000

2500

3000

3500


: ; : I i l i i i l

i i


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PART 3


INFRASTRUCTURE:

ROADS AND RAILSRush hour, 5:30 p.m. Ayala MRT [Metro Rail Transit] station, north-bound. Queue 15minutes to turnstiles. 10 Minutes wait and then one train comes, too crowded, onlyfive people in front of me get in. Next train after five minutes, but announcement is

made: train is defective, no passengers can ride. Wait for next train. Comes after threeminutes. Meanwhile the platform is bursting with people because trains come too fewand far between. I finally get in. Ride to Cubao takes 12 minutes. MRT is such a MESS!Fix those trains, add at least another five more per hour between 5 and 7 p.m., bothdirections.

- Carol Singson, Veteran MRT-3 commuter

Modern, efficient ground transportation infrastructure facilitates the efficientmovement of goods and people, while its absence increases transport cost andultimately harms country competitiveness. Unfortunately, this race to improve

public transport before traffic gridlock worsens is being lost. Although DPWH greatlyincreased its budget in the final years of the previous administration, too muchwent into barangay roads built for political purposes. Meanwhile, the national roadnetwork barely increased in two decades as traffic on national roads multiplied. Thecurrent Administration has corrected this and is implementing an ambitious nationalhighway and bridge program. There are seven limited-access toll roads operatingor under construction, all in Central Luzon, totaling some 300 kilometers. Another300 kilometers are planned by 2020. This acceleration of road investments led toa sharp improvement in the Philippine rank in the WEF quality of roads ranking,from the lowest of the ASEAN-6 in 2009-10 to 4th in 2012-2013 and 5th in 2013-2014. The Philippines ranks a distant last among the ASEAN-6 for the WEF quality

of railroad infrastructure. There is only one heavy rail line in operation. DOTC hassought unsuccessfully for two decades to restore rail service north of Manila; thePRC-supported North Rail project turned into a major white elephant. Three lightrail lines operate in Metro Manila, often at overcapacity. Planned new lines takea decade or more to implement. The current Administration is unlikely to see anynew rail project, which it initiated, completed during its term. If this slow pace ofimplementation continues, the urban centers will become increasingly choked andunattractive to private sector investment.


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PART 3: SEVEN BIG WINNER SECTORS: INFRASTRUCTURE: ROADS AND RAILS


106/312




Started Completed Completed


Backward/Regression Substantial Progress Substantial Progress


107/312









108/312






Not Ongoing No Longer Relevant No Longer Relevant


109/312


0%

2%

4%

6%

8%

10%

12%

14%

16%

0

50

100

150

200

2005 2006 2007 2008 2009 2010 2011 2012 2013p

Budget, lhs

Budget expenditure, lhs

DPWH budget, % of national, rhs

DPWH budget spending, % of national, rhs

DPWHs Budget and Actual Spending, 2005-2013p

Source: DBM (Total obligations; Adjusted-Budget; Actual-Expenditure)

1

21

41

61

81

101

121

141

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Singapore

Malaysia

Thailand

Philippines

Indonesia

Vietnam

Quality of Roads Rankings , ASEAN-6, 2008-2014

Source: WEF Global Competitiveness Reports; Note: Number of countries evaluated - 2008-134; 2009-133; 2010-139; 2011-142; 2012-144; 2013-148.

0%

10%

20%

30%

40%

50%

60%

0

20

40

60

80

100

120

140

160

180

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

LRT-2

LRT-1

MRT-3

Total YOY growth,rhs

Light Rail Ridership (LRT-1, MRT-2 & MRT-3), 2002-2012

Sources: LRTA and Metrostar Express; Note: MRT-2 and MRT-3 only started operating in April 2003 and December1999, respectively. Latest data available for MRT is only from February to April 2012.


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Following is an assessment, separate of the original recommendations in Arangkada, that providesmore detailed recommendations on Institutional Reforms and Railway Expansion projects for therail sector. This assessment compliments the infrastructure subsection Roads & Rails.

PARAMETER/INDICATOR PROGRESS/ACCOMPLISHMENTS RATING

1.1

1.2

1.3

1.4

1.5

2.1

2.2

2.3

2.4

2.5

2.6

2.7

2.8

2.9

2.10

+1

0

0

+1

0

-1

-1

+1

0

0

+1

-1

+1

0

+1

Institutional Reforms

Organization of a railwayregulatory authority

Financial restructuring of LightRail Transit Authority

Re-capitalization of thePhilippine National Railways

Fare adjustments relative toother transport modes

Legislation on railway reforms

Railway Expansion

LRT-1 Extension to Cavite,approx. 12-km length. Threeprevious attempts failed

LRT-2 Extension to East. approx4 km without ROW problem

Additional Railcars for MRT-3

Rehab and improvementof PNR South Commuter toCalamba

Construction of the Malolos-Tutuban (North) CommuterLine

Common Ticketing System forAll Railway Lines

Rehabilitation of existing LRT-1assets (cars, tracks, powerlines)

Completion of MRT3-LRT1Linkage

Construction of Metro CebuBRT System

Construction of MRT-7 onCommonwealth Avenue

A recommendation of the 1997 Philippine Transport Strategy Studyand 1999 Transport Infrastructure and Capacity DevelopmentStudy, both funded by ADB. DOTC invited consultancy proposalsin March 2013; nothing has been heard since.

Detailed recommendations from the 2009 JICA Study, discussedand accepted by inter-agency technical committee. No actionsince then.

The Php1.5 Billion capitalization of PNR, set in 1975, is inadequateand impaired by years of losses.

Fares on rails have been stagnant since 2003. Three attemptsproposed since 2011 were rejected by the President. This wouldhave negative impact on rail PPPs. Public consultations announcedDecember 2013.

Several Bills have been filed (and refilled) in Congress in the last15 years. None has moved beyond 2nd reading.

One of the low-hanging fruits proposed for immediate executionin 2010. Failure of bidding in October 2013. DOTC has set newbid submission for April 2014. Delayed by 16 months, based onoriginal schedule.

Award to sole pre-qualified engineering firm reset to December2013, more than 6 months behind schedule.

Budget for new railway cars released in November 2011 andawarded to a Chinese rail manufacturer, the sole bidder selectedby DOTC, made in October 2013, for 48 additional railcars.

This was supposed to be phase 2 of the north-south rail linkageproject funded via Korean ExIm Bank. Phase 1 was completed in2009. No action made in last 3 years.

This was the Northrail project whose contract with Sinomach wasterminated in 2012. Arbitration proceedings are in a snail pacemode. Reconfiguration to pure commuter line is on hold.

Five pre-qualified firms have submitted bids in November 2013.The contract was awarded in January 2014, 6 months behindoriginal timetable.

Several packages were to be tendered by LRTA - starting January2012. DOTC took over responsibility. Two packages that wereawarded were declared illegal. Scope now folded into the LRT-1Extension to Cavite.

This refers to the common station to serve platform transfers ofpassengers. Issue has been debated fo 3 years. Decision madein November 2013, bid award for construction is Q2 2014,according to DOTC.

Construction was supposed to be in January 2013 but was puton hold pending proof-of-concept by DOTC. Nothing has beenheard since.

In November 2013, NEDA approved issuance of performanceguarantee (equivalent to a financial guarantee) to concessionaire.Contract was signed in 2009, but no financial closing was possible

without the guarantee.

Notes on Rating:-1 = Retrogress +1 = Some progress or Movements 0 = No activity Best score is +5


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Recommendations: 20

Progress:

Rating:


Seaports




2013

2012

2011

Active Dormant

Active Dormant

Active Dormant


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PART 3


INFRASTRUCTURE:

SEAPORTSBecause the archipelagic Philippines depends on seaports to move most domesticand international commerce, efficiency of marine transport is critical to nationalcompetitiveness. Its high cost has long been an impediment to more commerce.

Tourism growth is also influenced by seaport quality. Improving maritime safety isimportant given the high loss of life from long-standing negligence of ship ownersand government agencies. The volume of international container shipments is smallcompared to Asias larger export economies and the lowest of the ASEAN-6. Althoughit has improved in the past two years, the Philippines ranks 116th of 148 countries inQuality of Port Infrastructure of the WEF Global Competitiveness Reportthe lowestamong the ASEAN-6 countries. Manila ranked 35th worldwide in tonnage volume and26th in container traffic. Over the last decade, there have been significant investments inthe international ports of Batangas, Davao, PHIVIDEC, and Subic, almost doubling theircombined capacity. Bangkok and Ho Chi Minh have capped their old city ports in favorof new deep-water ports. Manila remains the most congested port, and Batangas andSubic remain underutilized. The RoRo Nautical Highway, with three routes connectingLuzon-Visayas-Mindanao, can be expanded and made more efficient. Regional portsneed modernization with feeder links.

1

21

41

61

81

101

121

141

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Singapore

Malaysia

Thailand

Indonesia

Vietnam

Philippines

Quality of Port Rankings, ASEAN-6, 2008-2014

Source: WEF Global Competitiveness Reports; Note: Number of countries evaluated -2008-134; 2009-133; 2010-139; 2011-142; 2012-144; 2013-148.


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PART 3: SEVEN BIG WINNER SECTORS: INFRASTRUCTURE: SEAPORTS


114/312




Started Substantial Progress Started




115/312




Not Ongoing Started Not Ongoing


Started Not Ongoing Substantial Progress



116/312




Started Not Ongoing Backward/Regression




117/312







118/312










119/312


120/312




Started Started Not Ongoing






121/312





122/312






123/312

1

Recommendations: 25

Progress:

Rating:


Telecommunications




2013

2012

2011

Active Dormant

Active Dormant

Active Dormant


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PART 3


INFRASTRUCTURE:

TELECOMMUNICATIONS

Reform in this area has been considered. In a decade, Philippine telecommunicationsadvanced from being monopolistic, high-cost, and inefficient to having considerablecompetition, enabling a majority of the population and businesses to communicate at

home and abroad at much reduced cost. While fixed line penetration is lowest of theASEAN-, mobile phone penetration is high (), and digital fiber connections arerobust. However, the percentage of Internet use, which stood at . of the population in, remains a challenge. Broadband Internet is also very limited, with fixed broadbandpenetration at only for every persons and mobile broadband at for every persons. Only of cities and municipalities in the country have broadband access(Broadband Commission, ). The next new technology for the country is high-speedwireless broadband. Within a few years, many millions can have cheap Internet access onG and G mobile phones. The benefit for national competitiveness from these changescould be considerable. Filipinos will be able to avail of global SMS, email, and Interneton mobile devices and leap over the low household computer penetration level(ITU statistics, ). In the UN E-Governance Readiness Survey, Philippine rankinghas been declining from in to in (UN E-Government Survey, ). ForICT, two non-fiscal laws (Data Privacy and Anti-Cybercrime) have been enacted, whilethe DICT law, despite advancing near final passage in the th Congress, was opposedby the Executive.


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1



Popula-tion,

in mn

Mobilephone

subs per100 in-

habitants

Mainfixed tellines per100 in-

habitants

Propor-tion ofhouse-

holds withinternet

Internetusers

per 100inhabit-

ants

Mainfixed tellines, mn

Propor-tion ofhouse-

holds withcomputer

Mobilephone

subscrip-tion, mn1

Estimat-ed totalinternet

users, mn

Access to Information and Communication Technology Indicators, Selected Countries, 2012

China

India

Indonesia

Malaysia

Philippines

Singapore

Thailand

Vietnam

1350.7

1236.7

246.9

29.2

96.7

5.3

69.8

88.8

1112.2

864.7

282.0

41.3

103.0

8.1

85.0

134.1

88%

65%

37%

19%

16%

18%

7%

10%

278.2

30.9

38.3

4.6

4.0

2.0

6.4

10.1

81.3

68.7

115.2

140.9

106.8

153.4

120.3

149.4

571.3

155.6

37.9

19.2

35.0

3.9

18.5

35.1

20.6

2.5

15.5

15.7

4.1

37.8

9.1

11.4

88%

67%

41%

27%

18%

17%

15%

11%

42.3

12.6

15.4

65.8

36.2

74.2

26.5

39.5

Sources: ITU and World Bank (population)Notes: 1 - Includes both pre-paid and post-paid accounts


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